Speeches – The Hon Scott Morrison MPhttp://sjm.ministers.treasury.gov.au
TreasurerThu, 24 May 2018 06:08:46 +0000en-UShourly1https://wordpress.org/?v=4.9.4Address to the Higgins 200 Budget Breakfast, Melbournehttp://sjm.ministers.treasury.gov.au/speech/011-2018/
Fri, 11 May 2018 10:04:12 +0000http://minister-sjm.tspace.gov.au/?post_type=speech&p=3915Mark and Nicole and Steve, he calls himself lucky Steve, you saw him in the video there, Jo and Cruz and Nick, they’re like millions of Australians today. As they’ve got up this morning, and they might’ve been caring for an aged parent, and exchanged that loving morning smile, probably the best part of their day. They may be sitting on a tram this morning, on a train. They may be on site already. They can be out on a rural road somewhere. Wherever they are in Australia today, whatever they’re doing in Australia today this morning. One thing’s for certain, and that is the economy they live in over the next ten years, is going to determine a lot for them. It’s going to determine their choices, it’s going to determine the job market their kids are walking in to, that they themselves are in. It’s going to determine how they can save, how they can plan for their future. The economy is not a theory. It’s real. It’s what we live in. And, other than your health arguably, there are few things that are going to determine people’s choices in this country more than that. The economy we live in.

That’s why in this Budget, we have delivered a plan for a stronger economy. Because we want the economy that Australians live in over the next ten years to be stronger. We want them to have more choices. We want them to have more opportunities. We want them to be able to look forward to the next day, with less anxiety. If you don’t have a strong economy, then everything else suffers. There’s no money tree. There is the strong economy that we all rely on wherever we are, whatever circumstance we’re in. That’s what pays for the show. And in this Budget, you’ll see, that over the next four years the Australian economy will become a $2 trillion economy – a $2 trillion economy.

And Australians will be asking themselves, who do they trust to manage a $2 trillion economy? Who do they trust with the economy that they are going to live in, that they’re going to seek and thrive in? The small business owner who’s risked it all. What sort economy are they relying on to make sure that bet comes good on the business that they’ve made and the sacrifices they’ve taken and the risks they’ve taken.

Who are you going to trust for that stronger economy? A $2 trillion economy. A Government that over five years, as I’ll take you through in the slides this morning, that’s turned that ship around. Whether it’s on debt, or on deficit, or on jobs, on all the metrics, heading in the right direction with a clear plan for a strong economy, that can give Australians hope and confidence and a clear plan for their future? Or unbelieva-Bill? Bill Shorten. Unbelieva-Bill. That’s who he is. Rolled gold promises he made to workers when he represented them. Rolled gold promises he made to the leaders when he served them. Rolled gold promises he made about the people who’ve been sitting in his own Parliament. Unbelieva-Bill. Every time you hear Bill Shorten talking it’s unbelieva-Bill. On every occasion. And you know what, Australians know it. They know this bloke is shifty. And they know he’s unbelieva-Bill. And so it really is a question of trust. An absolute question of trust. Just as it was when John Howard and Peter Costello were in charge of what was not then a $2 trillion economy. But I tell you what, what they did put us on the path to be a $2 trillion economy. And we want to be continuing to be that Government, which continues Australia on the path to a stronger economy. Not a weaker one. A stronger economy is not built on bitterness and envy and the politics of bitterness and envy, but it’s built on the economics of opportunity, of aspiration, and that’s what this Budget is about.

Mark, Nicole, Steve, Jo and Cruz, Nick. Nick’s actually from the Shire in my electorate in Sydney, started a business called Modular Walls fifteen years ago. It’s now a $20 million business. He’s benefitted from the instant asset write off in recent years to get himself up over $10 million up to $20 million. He’s benefitted from the small business tax cuts. He’s benefitted from all of these things. And his business is growing, employing fifty people now, in my own community.

Jo and Cruz, Jo, is very happy because in this Budget, because of a stronger economy, we’ve delivered a drug onto the PBS called Spinraza, which will cost the family $370,000 a year, all beyond her capabilities, she knows that. As a result of a stronger economy, all Australians can now be proud that young Cruz is getting that drug for $40 bucks a script for a year. That’s a wonderful thing to be able to do. That’s what you can do when you have a stronger economy. You can’t do it if you can’t deliver a stronger economy or manage it.

And good old Steve, Lucky Steve as he calls himself, Lucky Steve lost his business during the GFC. And then he went back to school and trained a security guard, and now he’s got both knees all bunged up from two car accidents which he insists were not his fault if you ask him. And he’s out there doing that now, and he knows he’s going to have to work longer because he lost all of his super when his business went bust. So what he is now doing is getting himself back on his feet, literally, and the changes we’re making on super, the changes we’re making to support older Australians in this Budget are all helping him.

But what I wanted to focus on this morning as we go through the slides is how we’re turning that ship around and how a stronger economy – and how we continue to do that for the next four years, ten years – is going to keep us on that track. Over the last five years of our Government, we have been turning the fiscal situation around in this country. And we have had a pace of, to date, fiscal consolidation of 2 per cent and that will go to 3.8 per cent over the balance of the forward estimates period, when we will reach that $2 trillion economy mark. And we will have a modest balance in 2019-20, but we’re not here crowing about it, that’s what the numbers show. But we’re always very conservative when it comes to these things. We’re always very measured, we’re always very responsible, because it’s the money of the taxpayers of Australia that we’re managing so carefully, but that balance does build up to $11 billion in 2020-21, and onto $16.6 billion in 2021-22. But if you’re going into the medium-term, you can see there that those surpluses build to 1 per cent of the economy and more. But it does so with one very important condition attached to it, in a positive way. And it does so while ensuring over that period of time that we keep taxes under control, that we keep a speed limit on taxes, and that we ensure that you don’t allow your taxes to consume your economy and suffocate growth.

Higher taxes mean a weaker economy. Higher taxes all Australians pay for them, regardless of whether they’re levied on you or not, because of the crushing burden of taxes on the economy, that’s what suffocates jobs, suffocates growth, and ultimately leads to a weaker Budget.

Last year when I came to this event, I said that in the following year we would no longer be borrowing to pay for everyday expenses. Well I was pleased, and I know this was in the half-year statement in December, that we were able to get to that one year early. And while the Budget is not back in with an underlining cash balance until 2019-20. From this year 2017-18, right now, for the first time in a decade, Australia is no longer borrowing money to pay for welfare payments. We are no longer putting welfare on the nation’s credit card. That’s the first time that has happened in a decade, and it’s an important goal we have been working to for many years. But the other goal has been to turn the debt ship around.

2017-18 is the year that net debt peaks, and then falls. It has taken us five years to arrest the growth in the debt. Five years. We inherited debt growth at over 30 per cent per annum. And over the last five years we have been slowing that down. It’s like jumping onto the, I know I’m not in a Rugby League town so I promise you I won’t give too many Rugby League analogies this morning, but here’s one. You try and pull out those really big guys in a game of rugby league, you’ve got to really wrestle them. You’ve got to jump on their back and you’ve got to wrestle them to the ground. And it often takes more than one of you to try and tackle Andrew Fifita in the field. It’ll take you most of the afternoon. He’s a huge unit. And that’s what that debt has been like for us for the last five years. As the Government, we’ve wrestled it and we’ve grabbed it, and we’ve pulled to the ground, because from now on, we’re paying down debt. Debt will reduce, net-debt by $30 billion over the next four years. Over the next ten years, it will fall by more than $230 billion to 3.8 per cent of GDP over the next decade. As Peter said the other night, it takes you a decade of surpluses to pay down debt, he knows, because he did it. Net debt, $96 billion, paid down over the course of the Howard Government. We’re now on that path to arrest that broken debt and to now be in a position to start paying it off.

The risk of Labor getting their hands back on expenditure will see that turning point turn the other way, and we’ll just see that line go up again, and again and again. And we cannot risk it. On gross debt, gross debt in this Budget compared to what we said in MYEFO is actually around $126 billion less, and that’s the product of budgets moving into balance and staying there, and net interest payments and interest payments falling as a result cumulatively. And, as I’m sure Peter would remind you, that that on gross debt, the reason the line doesn’t run the same way as the net debt is because we’ve made, I think, the very prudent decision in last year’s Budget not to raid the Future Fund. And they’re earning around about 7 to 8 per cent a year. We’re borrowing at just over, or around 3 per cent a year. Why would you raid a Future Fund that is earning for you at that level to pay your unfunded superannuation liabilities and not allow it to reach a level of maturity where the liabilities it’s supposed to offset align with the maturity of the fund which can them meet them? So, in the short-term and the medium-term, over ten years it’s our commitment not to touch the Future Fund, and to allow the Future Fund to continue to keep [inaudible], and in the meantime we’ll obviously use issuing of Commonwealth Government securities to meet those requirements, because it costs us less to do so. And we’ll continue to do that. But the net debt trajectory, I think, is very clear. And we’re on now the path of bringing that debt down.

We have the lowest spending growth of any Government in fifty years. The lowest spending growth. In this Budget, real growth in expenditure is 1.6 per cent over the life of this Government, it’s 1.9 per cent real growth. And that compares to the previous government, where real growth in expenditure was running at 4 per cent per annum. I always find it intriguing that Wayne Swan, he had a target of 2 per cent real growth. He’d beat his chest about it. He was only out by 100 per cent, which for Wayne wasn’t too bad I suppose. But he was very committed to that 2 per cent, wasn’t he Kelly? I think Peter will probably remember. He was very committed, “it will only be 2 per cent”. Missed it by that much – 4 per cent real growth in expenditure. Labor just can’t control themselves when it comes to spending other people’s money – but we can. And expenditure as a share of the economy will fall to 24.7 per cent over the forward estimates, and that’s below the long-run average of 24.8 per cent. And that’s important to keep spending under control, to keep a Budget under control. But there is another set of guardrails. So you’ve got one set of guardrails on our fiscal strategy, which says that spending as a share of the economy will fall. And that’s what our record is showing.

But the other guardrail is the tax speed limit, which we have set as part of the fiscal strategy at 23.9 per cent. Now, as you can see there, it’s not an unreasonable level. I mean it’s not the long-run average, that’s at 22.3 per cent. It’s actually based on the average tax to GDP – and let me be clear here we’re talking about tax not all revenue. It’s the overwhelming majority of revenue, but there is other revenue other than tax. But tax is something we set. Now, it’s not set at the long-run average. It’s set at a period of Australia’s sound economic management, which was post-GST and pre-GFC. So, that’s the period it’s based on. And as you can see, it hasn’t been exceeded on too many occasions, and where it has, it’s only gone, hovered above that line before coming back.

Now, at the last election, Labor’s position on all the additional taxes; which was negative gearing, which was capital gains tax, which was raising the top marginal rate of tax, which was all of these measures, and increasing taxes on small businesses, increasing taxes on all businesses by the way. All of that was going to take, over the medium-term, the tax to GDP to 25.7 per cent. As you can see from that chart, that is unheard of. I mean Gough’s wildest fantasies never extended to taxing the economy that much. But Bill Shorten’s tax fantasy will become a reality if he ever gets the chance to get his hands on tax. If you don’t control tax, you can’t control your spending. You can’t give Government’s blank cheques on tax. They’ll spend it all. We would never give ourselves that license, and Australians cannot afford to give a blank cheque to unbelieava-Bill. He will spend it all and more. How do I know that? Because at the last election, he was going to take taxes to 25.7 per cent of the economy, and he still had a higher deficit. Labor’s spending always outruns their taxes and their taxes can run pretty hard. And that’s the great risk. And that’s the great comparison. And that’s why the trust can be put in place, because we will control our taxes and we will control our spending. That’s the responsible plan for a stronger economy. And that is what this Budget is delivering.

But I must remind you of what those taxes are; a higher tax on housing, a higher tax on investment, a higher tax on savings, a higher tax on small business, a higher tax on family business, a higher tax on what you earn. They’re all the taxes. They now total $220 billion over ten years. Throw that on the economy, and see what it’ll do. How will your business and the people who depend on your business for their job, their wage, their livelihood, how will that affect the economy that they will live in over the next ten years? But the one I hadn’t mentioned is very important. And that’s Labor’s retiree tax. Now, that’s one they didn’t mention at the last election. And last night Bill Shorten made a whole bunch of rolled-gold promises. But what he didn’t say is that at the last election he already spent all the money from his decision to say, “well we won’t have the Coalition’s Enterprise Tax Plan. We don’t believe anymore that companies should pay lower taxes.” They used to think that was a good idea, even Paul Keating thought it was a good idea, and they’ve walked away from all of that. They’ve changed their mind on that, just like they’ve changed their mind on tax to GDP speed limits and all these sorts of things. I’m surprised Bill Shorten is from Melbourne – or maybe it’s why – because if every time the wind blows he changes his mind, well perhaps that’s what’s been going on with his views on tax or anything else.

But on this issue of tax, what he has said last night, is he says he’s going to pay for another rolled-gold promise out of reversing the Enterprise Tax Plan. Which means this by the way, we have already legislated tax cuts for small and medium size businesses up to $50 million a year in turnover. So, what he announced last night very clearly was that if he is elected he is increasing the tax rates on small and medium size businesses. They will go back up to 30 per cent on all of these small and medium size businesses. The threshold for a small business of $10 million in turnover, which we increased to $10 million, will go back to $2 million. So gone for them doing a GST on a cash basis, gone for them pooled depreciation, gone for them the instant asset write off. A higher tax rate on small businesses in this country is Bill Shorten’s plan for the economy.

So, he can’t spend that again is my point. He’s already done it. At the last election, he spent every cent of the Enterprise Tax Plan reversal. So, he can’t spend it twice. The way he is actually going to, say he pays for what he announced last night is really the retiree’s tax. He’s going to rip the tax refunds of people who invested and owned shares in companies, he’s going to rip it off them and say he’s going to give it to someone else, because that’s how Labor works with tax. Our tax plan, our responsible tax plan, is about rewarding and encouraging investment and incentives for people to get ahead. It’s about the economics of opportunity, not the politics of envy and bitterness. We think people should be able to have tax relief without punishing someone else. But Labor’s going to punish people by ripping the tax refunds off people who have just committed the great crime of buying shares in an Australian company, and you’re going to take that and recycle it and try and give it to someone else. That’s theft. It’s dishonest. It’s shifty, and it’s unbelieva-Bill. And that’s why people can’t trust him. Every time you see his lips moving, he’s increasing your taxes. Every single time. Because he has to do that to even try and keep up with the rampant spending of what we know as Labor governments. Now, I don’t want to delay it too much longer, Kelly, there are a whole bunch of other slides there, and for those who have a keen interest in other issues; on tax receipts, and spending, and iron ore prices, and all of these things. I’m sure we can get into all of that. I want to just get to one last slide to remind everybody about what a stronger economy looks like.

This jobs slide – that’s what a stronger economy does. More than 1,000 jobs per day. As a Government, since we were elected, almost a million jobs have been created. That’s what a stronger economy looks like. You want to know what our Budget’s based on? Our Budget is based on commodity price forecasts [inaudible], we’ve all been very conservative on those, which has been recognised not only by us but by ratings agencies. It’s based on, and the analogy works as much for AFL as it does for NRL. It’s based on the 12 point turn-around principle. Someone who gets a job is not receiving welfare, and they’re paying tax. You stop the other side scoring, in your case a goal, in my case a try – a converted one – and then you go down the other end of the field and you kick one yourself, by getting someone a job. Our Budget is based on the 12 point turn-around principle. Getting people off welfare and into work. That’s what Liberal and National Governments always do, and we’re doing it again. Thank you very much.

]]>Address to the National Press Club, Parliament House, Canberrahttp://sjm.ministers.treasury.gov.au/speech/010-2018/
Wed, 09 May 2018 07:09:33 +0000http://minister-sjm.tspace.gov.au/?post_type=speech&p=3889The faces you have just seen, the stories you have heard, are why the Turnbull Government is focused on building a strong economy.

At the end of the day, everything rises and falls on a stronger economy.

Bringing the Budget back into balance. Paying down debt – all depend on continuing to build a strong economy.

*****

When framing this Budget, there was one key question in my mind.

What will be the economy that Australians live in over the next decade?

Maybe your kids are in high school or studying at university in their early 20s. Maybe they are only just starting out on the education journey.

What kind of economy do we want our kids to walk into when they finish school; their trading or apprenticeship, or University?

If you are a small business owner, what type of economy do you need over the next decade and beyond, to back in the risks and investments you have made to make your business a goer.

Maybe you are approaching retirement age and gearing up for life outside the workforce.

What type of economy will you live in?

The economy is not a theory, it not some staged reality television show. It’s real life. It has real consequences.

You live in it. It defines your choices and your opportunities, perhaps more so than anything else bar your health.

****

When I left university in 1989, I walked into the last decade when we had a recession.

I was one of the lucky ones that managed to get a job, but for many others it was a brutal slap; straight from an idealistic realm within the university campus to a brave new world: a battered economy, sliding backwards.

In the ensuing two years, under a Labor Government, more than 400,000 Australians joined the dole queue, with 200,000 fewer Australians in work.

While the unemployment rate rose five percentage points to 10.5 per cent, it was young Australians that paid the heavy price. Youth unemployment rose eight percentage points to a staggering 19 per cent, with 200,000 more young Australians out of work.

This put a significant strain on the Budget, with one in five working-age Australians surviving on welfare.

Economic growth was reminisced about. There was no growth in the economy for two years, in fact it was going backwards for much of that time. And a story most baby boomers like to remind their kids about: how interest rates hit 17 per cent.

This was my reality when I went to work.

I don’t want that reality for my kids, or yours.

I want our kids to enjoy the benefits of a stronger economy over the next 10 years so they can achieve all that they want to achieve and not be held back by circumstances beyond their control and the mistakes of a previous generation.

I want our small business owners, young couples planning families, or older Australians preparing for retirement to plan for that next 10 years with a great deal of confidence about where their economy is heading, knowing they will benefit from a stronger economy.

****

Mark and Nicole Roberts perhaps embody what it means to be Middle Australia.

A house in suburban Sydney. A mortgage. A couple of kids finding their way in high school.

They work hard, but still find time to volunteer in their community. A happy and honest life, but not one of indulgences.

Just like many Australian families.

This budget is for Mark and Nicole and their family.

It will mean they will keep around $1000 more of what they have earned. It’s their money. They earned it. They deserve to keep it.

For this family, it can be a new washing machine. It’s kids school uniforms and books. It covers several months of catching the train to work. It pays for half the power bill and more. It fills up the petrol tank around 10 times.

So anyone that thinks that this tax relief is meaningless, they are clearly out of touch, caught in an almond latte fog.

Our tax relief will not only provide help for those bills to be paid, in Nicole’s own words as you heard them: “it will allow a bit more freedom in budgeting and also allow us to give the kids just some extra things that they would like to do.”

More freedom.

Our seven-year tax plan also runs the sword through bracket creep, ensuring those who get more hours, do overtime, get a pay rise, get to keep more of it, rather than pay more to the Government.

When the second highest tax bracket is eventually abolished, most Australians earning above $41,000 will never face a higher marginal tax rate through their entire working lives.

So couples like Mark and Nicole, and their kids, are genuinely rewarded for their effort, not punished.

This is in addition to the welcome news we have already given the Roberts’ family on electricity prices, with the National Energy Security Board estimating annual power bills will fall by $400 on average for every Australian household from 2020, following the introduction of our National Energy Guarantee.

This Budget also provides certainty for their kids’ education. Our legislated needs-based funding for schools ensures they are now getting $24.5 billion more over the next 10 years.

And not just funding that is pumped into the schools without any accountability.

They don’t have to be scientists, Nicole says of her kids, but they need to be well educated.

All of this is reliant upon a stronger economy over the next ten years.

Trials and tribulations have been steady companions of the affable 62-year-old Brisbane grandfather. But not that you would know it, according to Luke.

You wouldn’t meet a bloke with a more positive disposition.

He’s lucky, as he’ll remind you.

He’s lucky, despite the fact his sheet metal manufacturing businesses went belly up in the GFC. He went broke, the bank took his factory, and he kissed goodbye to all his superannuation.

He’s lucky, despite the fact he had to give up his subsequent career as a landscaper when he had two car accidents. Neither were his fault.

He’s lucky, despite the fact he’s had to put his latest career as a security guard on hold to undergo a double knee replacement.

Lucky. That’s Steven’s view, and he’s sticking to it.

The beauty of people like Steven, is that they are not defined by their circumstances nor the long, bumpy road they have travelled to get here and the scars they bear. They are defined by their outlook, they are defined by who they believe they are.

Out of work as a 60 year old, and with barely a few coins in his super account, Steven went back to school to get his security license.

It was strange being back in the classroom, he says, but ever the optimist, he used the opportunity to not only learn, but share his experiences with the young people sitting next to him. That would’ve been an education in itself.

This Budget is for Steven Davey.

Australians are living longer, and that’s a good thing. What we are doing in this Budget is giving older Australians more choice, more flexibility and more opportunity in how they live their lives. More choice for a longer life.

Through this Budget, Steven will be able to contribute to his superannuation for longer; a huge benefit given his predicament.

Currently, he would have to work 40 hours a month to satisfy the activity test and be able to keep making contributions after he turns 65.

Our changes will give him a full year from when he stops working, to continue putting money into his superannuation account. Every little bit helps.

Our help continues when Steven likely moves onto the pension.

We have expanded the Pension Work Bonus that will allow Steven to earn an extra $1300 a year without reducing his pension payments.

We have also extended the pension loans scheme to full-rate pensioners and self-funded retirees, giving him the opportunity to increase his income in retirement by using the equity he’s built up in his home.

With the extra financial pressures that come with a longer life, we are backing older Australians like Steven if they choose to stay in work, with a range of initiatives to help them transition their skills, provide wage subsidies for employees who take them on, and combat age discrimination in the workforce.

We will also provide free online skills and health checks at ages 45 and 65 to help Australians to prepare for a healthy and longer life.

And those who wish to stay independent for longer and remain in their family home, we are funding 20,000 more home care places, ensuring the care you need comes knocking on your door.

More choices for a long life.

All of this is reliant upon a stronger economy.

****

You probably haven’t heard of a bloke named Nick Holden, even though his work is proudly on display at the Sydney Opera House.

But then again, his work is also on display at your local McDonalds, so he’s no Picasso.

Nick lives in the Shire – up up Cronulla – and he builds walls.

Clearly not your average wall, but an innovative modular wall that you can build and shape yourself, and one that doesn’t look like a stack of bricks.

Like most Australians who for some ungodly reason decide to renovate their home themselves, Nick inadvertently stumbled across an immovable little thing called council regulations when he was attempting to build a wall at the front of his house.

There were restrictions based on underground council services.

So he found another way. He liked his creation so much, and its functionality, he started his own business.

In those early days around 15 years ago, he was a one-man-band: buying the raw material, constructing the walls, answering the phones, writing the invoices.

He now has 50 employees, a state-of-the-art manufacturing plant in Kurnell, export orders from all over the world, and a handy $20 million in annual turnover.

We all love to hear success stories like this, when somebody steps out on their own, rolls the dice and risks it all. And comes up trumps, all because of a bright idea and damn hard work.

But they don’t just happen.

They are stories that are enabled out of a strong economy; where businesses are championed and given the opportunities and the right environment to invest, grow, employ skilled Australians and thrive.

In this Budget, we are backing businesses like Modular Walls. We are backing entrepreneurs who are giving flight to their bright ideas. We are backing businesses to create more jobs, and continue the incredible jobs growth we have seen in the last 12 months – more than 1000 new jobs created every single day.

We have already legislated tax cuts for businesses under $50 million; tax relief that is already filtering through Nick’s business and having an impact on his workers and his community.

How do we know that? Because as he told you in the video, Nick has always reinvested his profits back into the businesses and his staff, which has enable him to grow his operations, create more jobs and lift wages.

Lower taxes have also allowed him to compete on fairer terms with his global competitors when selling his products both here and abroad; remembering at 30 per cent, Modular Walls would be paying the third highest tax rate in the OECD.

In this Budget, we are also extending the popular instant asset write off for all businesses with a turnover up to $10 million for purchases of up to $20,000. Nick won’t be able to use this measure this time around, but in the past it has enabled him to buy a ute, some forklifts and office furniture.

To support our businesses further, and create an environment where science and technology is propelling our economy forward, we are investing more than $2.4 billion in Australia’s public technology infrastructure.

We are talking supercomputers, world-class satellite imagery, more accurate GPS, a national space agency and leading research in artificial intelligence.

This is about giving businesses the technology and infrastructure they need to not only drive innovation and compete on fairer terms with global peers, but actually lead the world in their field.

Giving our businesses an edge in a new smart global economy.

All of this is reliant upon a stronger economy.

****

When Jo Liete becomes overwhelmed by the tough times; when she finds herself doubting and questioning the fairness of life, she thinks back on that dream.

The dream that so vividly remains in the back of her mind, recalled freely in those dark moments.

There, sprinting across the soccer field, his arms and legs pumping wildly, was her boy Cruz.

She thought nothing of the dream at the time, given little Cruz was merely a bundle in her arms.

But now it’s a beacon of light for this Sydney hairdresser.

At 18 months old, Cruz was diagnosed with spinal muscular atrophy, a rare condition that would eventually strip away his newfound ability to stand, let alone walk. The condition causes a severe deterioration in the muscles till they simply stop functioning anymore, placing a great strain on vital organs.

He now whizzes around in his blue wheelchair, his name embroidered on its back, and a smile on his face. Nothing has managed to rock this five-year-old’s world, or his upbeat mum, despite his dire predicament.

That dream keeps her thoughts on track and her optimism full.

One day, instead of his mum having to carry him upstairs to bed, he will be running down that soccer pitch kicking goals in more ways than one. She knows it in her heart.

Most babies born with stage 1 spinal muscular atrophy die before they reach two. Those with stage 2, can reach their teenage years if they are lucky.

Cruz is stage 2.

There is hope, genuine hope, in the form of a breakthrough drug called Spinraza which is seeing incredible results in the US.

But the treatment for one patient can cost up to $400,000 a year – about $100,000 for every needle; clearly a burden too enormous for the vast majority of Australians families to bear.

This Budget is for Cruz and Jo.

In this Budget, we are spending $241 million to include Spinraza on the Pharmaceutical Benefits Scheme, taking a $100,000 needle treatment down to less than $40 a script.

This is what Budgets can do on a stronger economy.

Yes, they build nationally-significant infrastructure projects, fund our schools and hospitals, create programs to get people into work, and help older Australians in retirement.

But they can also save lives.

Young Cruz, and the 168 other kids around Australia suffering from spinal muscular atrophy, will now have every chance of not only surviving their formidable start to life, but thriving.

Too many have left us too early and we grieve with those parents, but they more than any, would not want to see other families go through the same unimaginable journey they have.

In addition to listing Spinraza on the PBS, the Government’s first project as part of our Genomics Health Futures Mission will be ‘Mackenzie’s Mission’ – a new $20 million trial in preconception screening for rare and debilitating genetic birth disorders, including Spinal Muscular Atrophy. This trial will provide vital information and hope for hundreds of parents who face difficult choices in starting a family.

This has been named in honour of Mackenzie Casella, who sadly passed away from spinal muscular atrophy in 2017. As her parents Rachael and Jonathon Casella have said:

“We can't change our story, we can't bring her back, but our story can change what happens to someone else. We cannot begin to express what Mackenzie's Mission means to us, it is our daughter’s legacy. With it, a part of Mackenzie lives on. She will save lives and prevent pain. We could not be more proud of her.”
All up, we are spending $1.4 billion adding new and amended listings to the PBS, including medicines to treat breast cancer, relapsing-remitting multiple sclerosis and a new medicine to prevent HIV.

All of this, of course, in addition to the record $30 billion in additional funding for hospitals between 2020-21 and 2024-25, courtesy of our new five-year public hospital agreement.

Guaranteeing the essential services that Australians rely on? All reliant upon a stronger economy.

****

This Budget is a plan for a stronger economy.

Tax relief for working Australians like Mark, Nicole and lucky Steve.

Backing businesses like Nicks to create more jobs

Guaranteeing the essential services that Jo and Cruz are relying on.

Keeping all Australians safe.

Making sure the Government lives with its means - keeping spending and taxes under control.

Under our plan, there will be a stronger economy for Australians to live in over the next decade.

]]>Budget speech 2018-19http://sjm.ministers.treasury.gov.au/speech/009-2018/
Tue, 08 May 2018 09:30:23 +0000http://minister-sjm.tspace.gov.au/?post_type=speech&p=3817Thank you Mr Speaker, I move that this Bill now be read a second time.

"What have you achieved? What are you going to do now? What does it mean for me?"

These are the questions Australians want answered tonight.

So let me get to it.

A stronger economy. More jobs. Guaranteeing essential services. The Government living within its means. That is what this Budget is about.

The Australian economy is now pulling out of one of the toughest periods we have faced in generations.

The Global Financial Crisis was significant. But coming off our once in a hundred years mining investment boom had an even bigger impact, ripping $80 billion out of our economy.

This directly impacted Australians and their families, including holding back wages.

During this difficult time, the Government has been working to strengthen the Australian economy and get the budget back on track.

And we've been making real progress.

The Australian Bureau of Statistics figures show that almost a million jobs have been created since we were first elected, as promised. This includes 415,000 jobs last year alone. More than a thousand jobs a day, three quarters of which were full time.

Businesses are responding to improved conditions by investing again, confidence is up. More new businesses are being started.

Keep Australians safe, with new investments to secure our borders, and, as always,

Ensure that the Government lives within its means, keeping spending and taxes under control.

That's our plan.

Turning first to the key financial outcomes in this year's Budget.

In 2017-18, the Budget deficit will be $18.2 billion, less than half what it was just two years ago.

This will be the best budget outcome since the Howard Government's last budget a decade ago.

The deficit will fall again to $14.5 billion in 2018-19.

The Budget is forecast to return to a modest balance of $2.2 billion in 2019-20 and increase to projected surpluses of $11.0 billion in 2020-21 and $16.6 billion in 2021-22.

The Turnbull Government has now stayed on track for a surplus for six successive budget updates.

Over the medium term the projected Budget surplus rises to over one percent of GDP, without breaching our tax cap, consistent with our fiscal strategy.

The forecast outcome for 2019-20, as always, is subject to Treasury's assessment of economic conditions at the time of the Budget.

As a Government we have put constraints on how much we spend and how much we tax, to grow our economy and responsibly repair the budget.

Real expenditure growth remains below two per cent, the most restrained of any Government in more than 50 years.

This will see Government spending fall to 24.7 per cent of GDP, below the
30 year average at 24.8 per cent over the forward estimates.

We are also keeping taxes under our policy speed limit of 23.9 per cent of GDP set out in our fiscal strategy.

Higher taxes to chase higher spending never ends well. Australians always end up paying for it one way or another.

With the budget returning to balance we will start paying down debt.

Net debt will now peak at 18.6 per cent of GDP in 2017-18 and will fall by around $30 billion over the forward estimates. Over the medium term net debt will fall to
3.8 per cent of GDP by 2028-29.

Gross debt will peak during 2019-20 at less than 30 per cent of GDP. Over the medium term gross debt will be $126 billion less in 2027-28 than was estimated at the mid-year update in December.

It has been a long road back from where we started in 2013.

We are close to our destination. We must stick to the plan.

Mr Speaker, I turn now to the measures in tonight's budget that form part of our plan for a stronger economy.

In this Budget we are providing tax relief to encourage and reward working Australians and reduce the cost pressures on households.

Tonight I announce a seven year personal tax plan to make personal income tax lower, fairer and simpler.

The plan will result in more working Australians paying lower rates of tax. It will be enshrined in legislation.

The plan has three parts.

One. Tax relief for middle and low income earners now. Two. Protecting what Australians earn from bracket creep. Three. Ensuring more Australians pay less tax by making personal taxes simpler.

Under our personal tax plan, 94 per cent of Australian taxpayers will pay no more than 32.5 cents in the dollar. That compares to 63 per cent if we leave the system unchanged.

This means more working Australians paying lower taxes on every extra dollar they earn.

The Turnbull Government believes that to create a stronger economy there must be reward for effort. You must not punish people for working hard and doing well. This is what underpins our plan.

Step one starts permanent tax relief to middle and lower income earners of up to $530 on what they will pay in tax next year, and every year after that.

This is what can be responsibly afforded, while keeping the Budget on track.

Those earning up to $37,000 paying 19 cents in the dollar will have their tax reduced by up to $200 on what they have paid in tax. The average tax paid by Australians in this tax bracket is $1,900 per year.

For those earning more than $37,000 paying 32.5 cents in the dollar, their tax will be reduced up to a maximum of $530 per year. The average tax paid by Australians in this tax bracket was $10,400 per year in 2015-16.

4.4 million taxpayers with an income between $48,000 and $90,000 will receive the maximum tax relief of $530.

For middle income households with both parents working on average wages, this will boost their 'kitchen table' budget by more than $1,000 every year.

For those earning above $90,000 the tax relief reduces to zero at just over $125,000.

Step one will be delivered by an additional targeted tax offset through annual tax returns.

This tax relief will not be clawed back by other tax increases, including the Medicare levy, which will remain unchanged.

Step two of the plan ensures that a pay rise, extra overtime or working more hours does not get eaten up by higher tax rates.

In the 2016-17 Budget we increased the top threshold for the 32.5 per cent tax bracket from $80,000 to $87,000. This kept 500,000 Australians from paying more tax at
37 cents in the dollar.

This threshold will now be set at $90,000 from 1 July 2018. This will stop an additional 210,000 Australians paying 37 cents in the dollar.

In 2022-23 we will make more substantial changes.

The $37,000 threshold will be lifted to $41,000, stopping half a million Australians facing a marginal rate of 32.5 per cent and the $90,000 threshold will be raised again to $120,000, preventing 1.8 million Australians paying 37 cents in the dollar.

Step three of the plan makes our tax system simpler.

In 2024-25 we will simplify the personal tax system by abolishing the 37 per cent tax bracket entirely.

Australians earning more than $41,000 will only pay 32.5 cents in the dollar all the way up to the top marginal tax rate threshold which will be adjusted to $200,000, to account for inflation and expected wage movements over the next seven years.

Under the Turnbull Government's personal tax plan most working Australians earning above $41,000 are likely to never face a higher marginal tax rate through their entire working life.

The plan is affordable and funded. The total revenue impact on the Budget and forward estimates is $13.4 billion. The overwhelming majority of this cost commences in 2019-20, the same year the Budget is forecast to return to balance.

This is not spending or a give-away. We are simply enabling Australians to keep more of what they have earned.

Our tax cuts are also not being achieved by increasing taxes elsewhere.

Everyone pays the price of higher taxes. It weakens the economy and costs jobs.

You don't have to punish some people with higher taxes, who are already paying the majority of tax, to give others tax relief.

In this Budget there are other ways we are reducing cost pressures on Australian households.

Through the ATO we will be proactively finding your lost super and have it sent to your active superannuation account, ensuring it doesn't get eaten up in ongoing fees.

We're banning exit fees on superannuation accounts for when you want to change funds.

We will stop superannuation funds from forcing young people under 25 or with low balances to pay for life insurance policies they have not asked for or do not need.

The Pension Loans Scheme will be opened to all older Australians, including full rate pensioners and self-funded retirees, so they can boost their retirement income by up to $17,800 for a couple, without impacting on their eligibility for the pension or other benefits.

An expanded Pension Work Bonus will allow pensioners to earn an extra $1,300 a year without reducing their pension payments. For the first time, the bonus will be extended to self-employed individuals who can now earn up to $7,800 per year.

And we will oppose unfair tax grabs on retirees and pensioners, by enabling everyone who has invested in Australian companies that issue franked dividends, to keep their tax refunds.

We will ease financial pressures on families in regional areas, by relaxing the Parental Income Test for access to Youth Allowance for independent students from January 1, 2019 by an additional $10,000 per annum and an additional $10,000 for each additional child.

The National Energy Security Board estimates annual power bills will fall by $400 on average for every Australian household from 2020, following the introduction of our national energy guarantee.

We will maintain our responsible and achievable emissions reduction target at
26-28 per cent, and not the 45 per cent demanded by the Opposition. That would only push electricity prices up.

And we will not adopt the 50 per cent renewable energy target demanded by the Opposition that will also only put electricity prices up.

All energy sources and technologies should support themselves without taxpayer subsidies. The current subsidy scheme will be phased out from 2020.

And we will keep the pressure on the big energy companies to give you a better deal. Already this has led to households saving several hundred dollars a year.

In this Budget the Turnbull Government is backing business to create more jobs.

We have already legislated tax cuts for small and medium sized businesses.

For small business we will once again extend the instant asset write off for businesses with a turnover up to $10 million for purchases of up to $20,000.

In this Budget we are making sure small businesses don't get ripped off by other businesses who deliberately go bust to avoid paying their bills, with tough new anti phoenixing measures.

And we will invest more in our people, providing an additional $250 million for the Skilling Australians Fund to deliver business with the people and skills they need to grow their business.

Tonight we announce a new 21st century medical industry plan to create more jobs in this fast growing sector of our economy. The health sector represents 7 per cent of our economy and 14 per cent of jobs.

Our plan will provide more support for medical research projects, new diagnostic tools, clinical trials of new drugs, scientific collaboration, and development of new medical technologies that can be sold overseas.

In particular we will back in Australian medical scientists through the largest single investment of the Medical Research Future Fund to date of $500 million over ten years for Australia to become a world leader in genomic research.

This is about building another strong and competitive industry in Australia that will generate income and jobs, from the white coats in the labs to the workers making new medical devices on the shop floor.

But it's not just science and technology in the medical industry we're supporting.

The Government will invest more than $2.4 billion in Australia's public technology infrastructure. This includes supercomputers, world class satellite imagery, more accurate GPS across Australia, upgrading the Bureau of Meteorology's technology platform, a national space agency and leading research in artificial intelligence.

It's exciting, setting up our manufacturing, agriculture, transport and service industries for success. They rely on this public infrastructure to do their own research, develop new products and services and run their businesses more efficiently.

To support companies genuinely investing in R&D we are refocusing the R&D tax incentive to give more support to companies that invest a higher proportion of what they spend in R&D, over and above what others would just do anyway.

We're backing farmers to create more jobs.

In addition to better weather and GPS services, there will be additional funding to protect against pests, disease and weeds. We are funding new technology to better detect biosecurity risks and we will increase our efforts to negotiate away technical trade barriers to agricultural exports in more countries.

Boosting the Bruce Highway from Pine River to Caloundra and Section D from Cooroy to Curra. The Buntine Highway in the NT. The Adelaide North South Corridor.

But we always know that more needs to be done.

That's why tonight I am announcing a $1 billion Urban Congestion Fund to support projects at a State level to fix pinch points and improve traffic flow and safety in our cities.

There will also be a $3.5 billion Roads of Strategic Importance initiative upgrading key freight routes. This initiative will boost our regional economies, backed by a new funding round for the Building Better Regions Fund.

A strong economy also needs a strong, accountable and competitive 21st century banking and financial system.

We will continue to roll out our stronger penalties, powers and enforcement to take action on misconduct in the sector. The legislated major bank levy will continue and the Australian Financial Complaints Authority will stand up on 1 November and our Banking Executive Accountability Regime starts on July 1.

In this Budget we are also moving forward with our Open Banking Regime and consumer data right, giving small businesses and households more control, more choice and better deals.

Mr Speaker, our plan for a stronger economy means the Turnbull Government can guarantee the essential services that Australians rely on.

Just because you are getting older does not mean you should have to surrender your dignity or your choices.

We're living longer. It's a good thing.

We want to preserve and increase the choices of older Australians.

To support the choice of older Australians who wish to stay at home and avoid going into residential aged care the Government will be increasing the number of home care places by 14,000 over 4 years at a cost of $1.6 billion.

By 2021-22, over 74,000 high level home care places will be available, an increase of 86 per cent on 2017-18.

We will also be providing $146 million to improve access to aged care services in rural, regional and remote Australia.

We will also provide $83 million for increased support for mental health services in residential aged care facilities, especially to combat depression and loneliness.

And we will stand up for older Australians to keep them safe and prevent elder abuse, with new support services and a national online register for enduring powers of attorney.

In addition to the Pension Loans Scheme and Pension Work bonus changes, the Government will back the choices of older Australians who choose to stay in work.

This will be done by supporting them to transition their skills, providing wage subsidies of up to $10,000 for employers who take them on, and combat age discrimination in the workforce.

We will expand the Entrepreneurship Facilitators program, and create a new Skills and Training Incentive to provide mature age workers with the opportunity to update their skills.

We will help Australians plan for a longer and healthier life with new online skills and health check-ups at ages 45 and 65 years, linked to programs that can help them better prepare.

We will fund targeted programs run by local sporting organisations and community groups to encourage older Australians to remain physically active for longer.

For parents and students, our legislated needs based funding for schools delivers $24.5 billion more over the next 10 years. That's 50 per cent more funding per student, on average, over a decade.

This year schools will receive a record $18.7 billion, with a legislated rise to around $30 billion in 2027.

The issue now is to focus on how the money can be best spent to give teachers the tools to equip students to grow and succeed. That is now our focus.

In this Budget we are extending the National Schools Chaplaincy programme on a permanent basis, with a special new anti-bullying focus. The National Partnership Agreement on universal access to early childhood education will be extended for a further year at a cost of $440 million.

On July 2, the Turnbull Government's new child care package will come into effect.

Our new five year hospitals agreement, which is being signed onto by the States and Territories, will deliver $30 billion in additional funding, a one third increase over the previous five years.

And following last year's Budget, funding for Medicare and the Pharmaceutical Benefits Scheme or PBS has been guaranteed in legislation.

This Budget includes an extra $1.4 billion for listings on the PBS, including medicines to treat spinal muscular atrophy, breast cancer, refractory multiple myeloma, and relapsing-remitting multiple sclerosis, as well as a new medicine to prevent HIV.

Lifeline Australia will receive additional support as will funding for Mental Health Research, with $125 million over 10 years from the Medical Research Future Fund.

The Government will also provide $20.9 million to support parents and infants by funding tests for new conditions and ensure that debilitating conditions are picked up at the earliest opportunity.

The Government will provide $154 million to promote active and healthy living, including $83 million to improve existing community sport facilities, and to expand support for the Sporting Schools and Local Sporting Champions programs.

In rural and regional areas we have funded a plan to get more doctors to where they are needed through a new workforce incentive programme. This plan includes the establishment of a new network of five regional medical schools within the broader Murray Darling Region.

And we have moved to guarantee rural and remote access to dental, mental health and emergency medical services through increased financial support for the Royal Flying Doctor Service.

Our veteran centric reform package will continue with a planned additional $112 million in this Budget, as will our support for ongoing veterans' mental health and employment initiatives.

Finally, every dollar and every cent committed to delivering the National Disability Insurance Scheme remains in place and always will.

The Liberal and National parties can always be trusted to keep Australians safe.

Stopping the boats and keeping them stopped.

Protecting Australians from the threat of terrorism.

Hunting down criminals.

Giving our defence forces what they need to do their job to protect our values and our freedom.

Protecting Australia from those who seek to do us harm and exert unwelcome influence on our soil.

This is what the Turnbull Government is doing.

In this Budget we are taking further action, directly investing $294 million to harden up security at our airports.

$50 million to upgrade security infrastructure at 64 regional airports.

$122 million to enhance screening capability for inbound air cargo and international mail.

$122 million to increase police and border force presence and capability at nine major domestic and international airports.

There is also additional investment to improve scrutiny of visa processing and passenger screening, and clearance of visitors and goods at our borders.

And we are investing more than $160 million to help our police, criminal intelligence and domestic security agencies fight crime and prevent terrorism, including
$68.6 million to disrupt, prevent and investigate child exploitation and abuse.

New powers will also be sought to back in States and Territories to crack down on offenders and criminals with outstanding warrants and fines by withholding their welfare payments.

Lastly, in this year's Budget, the Turnbull Government will ensure that the Government lives within its means.

A stronger economy keeps spending under control by getting Australians off welfare and into work. After record jobs growth, the proportion of working age Australians now dependent on welfare has fallen to 15.1 per cent — the lowest level in over
twenty five years.

Improved compliance and better targeting has also assisted in getting welfare spending under control and we will continue to take action in this area.

This Budget includes new measures to further improve the integrity of our tax system.

We are cracking down to ensure that R&D tax incentives are used for their proper purpose, with enhanced integrity, enforcement and transparency arrangements, saving taxpayers $2 billion over the next four years.

Our crack downs on multinationals have already brought around $7 billion a year in sales revenue by multinationals into our tax net. But we need to do more.

We will close down another tax loophole opened up by the Rudd Government back in 2008 that gave foreign companies a tax break over Australian companies, by changing the tax treatment of stapled structures.

We are also further tightening thin cap rules to stop multinationals from fiddling with how they account for debt, to reduce their tax liabilities.

The next big challenge is to ensure big multinational digital and tech companies pay their fair share of tax.

Over the past year I have been working with counterparts at the G20 to bring the digital economy into the global tax net. In a few weeks' time I will release a discussion paper that will explore options for taxing digital business in Australia.

At home we also need to shine a light on the black economy.

Taxes should be lower, simpler and fairer, but taxes must also be paid.

Honest and fair businesses and taxpayers are being ripped off by those who think they are above paying tax.

In response we will be implementing the recommendations of our Black Economy Taskforce, targeting sectors where there is higher risk of under reporting of income.

This is expected to bring in $5.3 billion over the next four years.

These measures include outlawing large cash payments of greater than $10,000 in the Australian economy.

This will be bad news for criminal gangs, terrorists and those who are just trying to cheat on their tax or get a discount for letting someone else cheat on their tax.

It's not clever. It's not OK. It's a crime.

Mr Speaker, our plan for a stronger economy will create more jobs and guarantee the essential services that Australians rely on.

Our record of financial responsibility means that under our plan, Australians can plan for their future with confidence.

We must stick with this plan because it's working. We can't afford to risk the alternative.

So to be clear, our plan for a stronger economy is:

Tax relief to encourage and reward working Australians,

Backing business to invest and create more jobs,

Guaranteeing the essential services Australians rely on,

Keeping Australians safe, and

Ensuring the Government continues to live within its means.

Once again, Mr Speaker, I commend our plan for a stronger economy and this Budget to the House.

]]>“Lower taxes for a stronger economy”, Address to the Australian Business Economists, Sydneyhttp://sjm.ministers.treasury.gov.au/speech/006-2018/
Thu, 26 Apr 2018 03:32:34 +0000http://minister-sjm.tspace.gov.au/?post_type=speech&p=3752Our economy is continuing to strengthen.

All Australians do and must share in the benefits of a stronger economy.

The benefits of a job, an income, a wage, reward for effort, investment and making sacrifices. The benefits of essential services like Medicare, Hospitals, Schools, aged care and the pension.

All of this is reliant on a strong economy.

Without focusing on doing the things that build a stronger economy, you are putting these benefits and these services at risk.

In twelve days I will deliver my third budget. It comes at another pivotal moment for our economy where opportunity and risk abound in equal measure.

[Chart 1]

Jobs growth remains strong and has been at record levels under the Turnbull Government.

More than 1000 Australians have been getting jobs every single day over the past year, with the vast bulk of these jobs full-time positions. This has led to a tightening in the labour market which is building pressure for better wage growth.

As noted by RBA Governor Philip Lowe earlier this month: "The latest data suggest that the rate of wages growth has now troughed, with a pick-up evident in the most recent quarter. A further lift is expected."

[Chart 2]

Business conditions are also strong, prompting a welcome surge in investment in the non-mining sector, increasing by 12.4 per cent through the 12 months to December 2017 - the largest rise in a decade.

Last week the IMF provided a further endorsement of the government's economic outlook that underpins our numbers, upgrading its forecast for 2018 to bring them broadly in line with our own forecasts and that of the RBA.

Our economy is finally shaking off the dulling effects of the downturn in the mining investment boom.

Now is the time to build upon growth, to create even more jobs and ensure as a government that we can continue to guarantee the essential services Australians rely on.

That is what this year's Budget will be about - a stronger economy, to create more jobs and guarantee the essential services Australians rely on.

And, as always, ensuring that the Government continues to live within its means.

A weakened economy erodes all of these vital things.

The Turnbull Government's national economic plan is delivering a stronger economy and we need to stick to this plan.

Our legislated tax cuts have given small and medium businesses a welcome shot in the arm, providing them with the ability to invest, grow and hire more Australians.

We are building Australia through our $75 billion infrastructure plan, to bust congestion in our cities and make our rural and regional roads safer.

Our plan now includes a $5 billion commitment to build the long-awaited Tulla Rail in Melbourne; a nationally-significant project decades in the waiting. So many of us have sat idle in traffic on the Tullamarine Freeway, pining for a fast train.

We have delivered record investment in our defence industry, creating jobs and supporting new high-tech companies. We have opened the doors to an array of opportunities for our businesses courtesy of new trade deals across the globe.

We have invested in science and technology, new business start ups, backing entrepreneurs with new tax incentives, supporting our manufacturing industries transition and taking action in our banking and financial services sector to ensure it is more accountable, more competitive and doing the right thing by customers.

Naturally, a stronger economy provides for a stronger budget.

[Chart 3]

Company profits that were savaged in the prolonged come down from the mining investment boom, with private company profits in the National Accounts decreasing on average by around one per cent every year in the five years to September 2016, took a heavy toll, including on Government revenues.

During this time, businesses put their hands in their own pockets to keep their employees in jobs and provide the modest wage increases they could.

Since then, the clouds have been lifting. The tangible evidence of this is found in the increased tax receipts to the Commonwealth.

Tax receipts up until February were running $4.8 billion higher than we estimated at MYEFO in December, including $1.2 billion in higher individual tax receipts and $3 billion in higher company tax receipts.

This has been preceded by the Government taking action to get spending under control, employing a strict budget policy on each department: Want to spend money? Find taxpayers some equivalent savings to offset it.

[Chart 4 ]

This has brought a consistent discipline to our budgetary process that has kept us on track. Real expenditure growth remains below two per cent – the lowest of any government in at least the last 50 years.

As a Government we have also not relied on commodity price assumptions to prop up our budget. Hence where there have been improvements they have supported the bottom line, rather than being spent on the hope they will be sustained, as predecessors have done.

This will be another responsible budget that sticks to our plan that has been keeping us steadfastly on track over the past five budget statements to bring the budget back into balance by 2020-21, shoring up our AAA credit rating in the process.

Australians are not easing off, and nor do they expect the Government to.

That is why this will be another Coalition Budget that sees the Government living within its means.

But it will also be another Coalition Budget that continues to focus on strengthening our economy as our priority.

[Chart 5]

Our actions to turn around investment in this country and get jobs growth moving again, the majority being full time permanent jobs, and reducing welfare dependency for working age Australians to the lowest level in 25 years, is also why we've been able to stay on track to bring the budget back to balance.

A stronger economy means a stronger budget.

In this year's budget, we will act again to build a stronger economy that enable us to shore up the nation's finances and guarantee the essential services that Australians rely on both now and into the future.

Only a stronger economy, backed up by a Government that knows how to live within its means, can provide a real guarantee on these essential services - Medicare, schools, hospitals, aged care and disability services

[Chart 6]

In last year's Budget, we asked Australians to fill the $57 billion shortfall in funding for the National Disability Insurance Scheme that we inherited when we came to Government through a 0.5 per cent increase in the Medicare Levy, each according to their means.

Labor put forward the same proposal to part fund the NDIS when they were in Government, which was supported by the Coalition on a bipartisan basis in opposition. It was the right thing to do.

The plan we outlined last year has been well supported by Australians but, disappointingly, this time it did not receive bipartisan support from Bill Shorten and the Labor Party in the Parliament.

Australians agreed it would provide certainty to the hundreds of thousands of Australians who live with a disability, and help support their families and carers.

We have appreciated that support as I am sure those with disabilities and their carers and families have also appreciated.

As my brother-in-law Gary, who has MS, explained to me last year about living with a disability and I recounted to the Press Club:

"People are enormously generous, not just happy to help, but keen to help. It's not flash being disabled. But if there's anything good about it, it's that you're disabled in Australia".

We did not put forward this proposal in last year's budget lightly, as we knew it would cost Australians more, but we had faith in the big heartedness of Australians. It was about helping your mates.

Julia Gillard put it well when she said "everyone puts in because everyone takes out".

Labor have clearly asked away from this view in Opposition.

A year later, our fiscal position has improved. The conservative estimates we had prepared at the time, proved to be conservative.

It is always the right thing to do be on the cautious side of the line when it comes to managing your finances.

Our economy is now stronger and it is continuing to strengthen under the Turnbull Government's national economic plan. This has created more and better options.

That is why we are now in a position to give our guarantee to Australians living with a disability and their families and carers that all planned expenditure on the NDIS will be able to be met in this year's Budget and beyond without any longer having to increase the Medicare levy.

Fiscal details of this decision will be set out in the budget. The decision is also taken without impacting on the Government's plan and timetable to return the budget to balance.

This is the benefit that comes from a stronger economy.

It remains the case that Labor did not fully fund the NDIS when they were in Government. What I have announced today is that this gap can now be made up over time by continuing to deliver a stronger economy and by ensuring the Government lives within its means.

The Turnbull Government has a plan to do this and can be trusted to deliver both.

The task we now have to focus on is delivering the NDIS in the most efficient and effective way possible. It still has a long way to go and there is still a lot of work to do to get it right. That is what we will be focusing on.

The reason we proposed to increase the Medicare Levy was only to fully fund the gap left behind by Labor on the NDIS.

By their own admission, however, Labor's proposal to increase the Medicare levy for those earning more than $87,000 and to increase the top marginal tax rate had nothing to do with funding the NDIS. Their proposal was just another Labor tax increase on working Australians.

So why now have Labor dropped their Medicare levy increase, but kept their permanent increase in the top marginal rate.

This is in addition to Labor already boasting of and getting ready to hike more than $200 billion in additional new taxes on Australians if they win power at the next election.

Taxes on small businesses, taxes on retirees and pensioners, taxes on family trusts, taxes on mums and dads who negatively gear their investment properties and taxes on workers. The list grows by the month.

Labor's plans for higher taxes will make our economy weaker, not stronger, putting at risk the benefits, the jobs, the wages, the incomes and the essential services that depend on a stronger economy. And we all know Labor can never live within their means.

As economists, you are more than aware of the intrinsic link between tax and economic growth, and how creating an unnecessary tax burden squashes incentive and aspiration, and chokes demand.

Tax can go too far.

The Turnbull Government fundamentally believes that one of the ways you build a stronger economy - to create jobs and allow you to guarantee the essential services Australians rely on - is by ensuring the tax system does not act as a sheet anchor on growth and aspiration.

The bigger the tax burden gets on the shoulders of Australians and our army of business owners, the greater the risk that it will cost jobs and restrain economic growth.

This is why it is important that when you put a budget together, you set clear ground rules on the level of tax you are prepared to ask Australians to pay. And you stick to those rules.

One of those rules that we have set is a speed limit on taxes, so we don't get into the fools scenario where you let your taxes chase your spending.

[Chart 7]

We have imposed a speed limit on taxes in our Budgets, that requires that taxes do not grow beyond 23.9 per cent of our economy.

It's easy to keep spending more money if you think you can endlessly keep raising taxes. That's what Labor thinks. But this thinking forgets that if you tax your economy too heavily it begins to eat itself, like a snake eating itself from the tail. That is what Labor's tax policies will do to our economy.

In the last forty years taxes as a share of our economy have only been above 23.9 per cent of our economy on just five occasions, including the one off spike from the introduction of the GST, rising only as high as 24.3 per cent.

Labor have abandoned their previous commitment to a speed limit on taxes. They do not want to be constrained.

At the last election Labor's proposed tax increases were going to take taxes as a share of our economy to 25.7 percent. Even Whitlam did not dream of taxes at those levels. At that level, Labor will impose $50 billion a year more in taxes than our Government's tax speed limit at the end of the medium term.

And now they have extra new taxes on family businesses, retirees and pensioners adding to those on Small businesses, housing, investment, wage earners, and the list goes on.

Under Labor, Australians will pay more in higher taxes, as they take your money and just spend it and whatever pops into their head.

Our tax speed limit is not just a discipline to protect against uncontrolled spending, it's also an indicator of when tax relief is most urgent for the economy. It's a warning light.

In 2016-17, tax-to-GDP was 21.6 per cent, with tax receipts having grown by 4.7 per cent from the previous year. This year as company profits have moved out of their lull, Treasury predicts a 7.9 per cent rise in tax receipts, with the tax-to-GDP ratio to rise to 22.5 per cent before reaching 23.8 per cent in 2020-21 when the budget is projected to return to balance.

Clearly, tax relief will be required to stay under our cap on current projections over the forward estimates and across the medium term.

[Chart 8]

But it will also be required to prevent too many Australians moving into a higher tax bracket. The Parliamentary Budget Office predicts bracket creep will see Australians paying an extra $52 billion in tax by 2021-22 if our tax thresholds remain the same.

So in light of these figures, it is important to define who actually does pay tax in this country. Who shoulders the burden, and is our system (and the perception of our system) fair?

Because there are plenty of myths being put about by those who just want to increase your taxes.

A regular refrain from the high tax club is that our companies don't pay tax.

Well there is $68 billion in corporate tax receipts from 2016-17 that says otherwise. As a percentage of GDP, that collection represents 4.4 per cent; that is twice what it is in the US at 2.2 percent and significantly higher than the UK at 2.5 per cent.

In the latest tax statistics to be released tomorrow, the top 10 companies paid 27 per cent of total corporate tax - more than the amount paid by almost one million small companies across Australia.

The top 50 companies paid 38 per cent of all corporate tax collected.

[Chart 9]

But not only are these companies paying a significant share in taxes, they are also paying one of the highest corporate tax rates in the OECD at 30 per cent.

When Peter Costello slashed the company tax rate from 34 percent to 30 per cent in 2001, there were 19 OECD countries that had a higher rate than Australia's new setting.

Now that President Trump's substantial tax cuts have taken effect, there are only two. And in 2020 there will be one after France's already legislated rate cut takes effect, leaving our companies at a significant disadvantage compared to our competitors who are benefiting from a 19 per cent rate in the UK, a 17 per cent rate in Singapore and on average a

combined federal and state rate of around 25 per cent in the US.

We have already delivered a five percentage point reduction in tax rates to businesses with a turnover under $50 million, and it remains our mission to extend those cuts to all businesses, to give them the incentive to invest, hire more Australians and create a stronger economy.

We also see the same picture on personal income tax.

This burden is also carried by the few, not the many, despite the claims of the high tax club.

[Chart 10]

A massive 17 percent of the $186 billion collected in personal income tax for 2015-16 was paid by the top one percent of taxpayers.

One percent of taxpayers, paying seventeen percent of the personal income tax collected!

Extend that out further and you find that the top 10 percent of taxpayers pay 45 per cent of total personal income tax paid to the Commonwealth.

Twenty years ago, the top 10 per cent paid 36 percent.

The latest 2015-16 tax stats also show the 416,000 Australians who were in the top tax bracket paid $56 billion in that year - that is 4.1 percent of taxpayers paying 30 per cent of the personal income tax raised.

When you combine the top two tax brackets, you get 2.4 million Australians, 23 per cent of taxpayers, paying 65 percent of personal income tax.

Less than a quarter paying almost two thirds.

These are the people that Labor believe need to pay more tax and they are happy to hit. These are people earning more than $87,000 per year. These are Labor's fat cats.

It is also important to note that in 2015-16, 3.6 million Australian households received more in Government payments than they paid in income taxes. This reflects around 40 per cent of households.

Four out of every ten households not paying any net tax after benefits.

The income tax burden is already falling on a smaller group of Australians who also play a critical role in creating and building the stronger economy that all Australians rely on.

[Chart 11]

And if Labor get their way, they will send Australia's top marginal tax rate to 49 per cent, compared to 47 per cent under the Coalition, not only well ahead of most of our fellow OECD nations, but with a vastly lower threshold where that top rate kicks in.

Being successful in Australia is not something we should sneer at, nor something we should seek to punish, discourage or demonise.

We must always resist the temptation to play class warfare in Australia. We are not the United States or the United Kingdom. We have a very different economic history.

Do we really think the country and our economy is going to grow by adopting the politics of envy rather than the economics of opportunity? It has never worked before.

Success should be nurtured and celebrated, instead of having a target on its back from Labor.

Successful Australians do not begrudge paying the larger share of tax, including proportional to their income. We have a progressive tax system in Australia. It is what makes us a fair society. It is what enables us to provide a strong and reliable social safety net.

But we cannot push this to breaking point, where you only end up committing economic self harm.

I want a tax and welfare system that rewards effort and fosters aspiration; a system that is fair and balanced for all Australians. One that doesn't seek retribution but instead sets out to lift the living standards of all.

For you to do better, someone else does not have to do worse, or be held back. This is poverty thinking that seems to have completely captured the Labor party and its leader, Bill Shorten, who has decided to embrace the extremes of politics, rather than pursue a sensible middle ground economic path.

When it comes to tax we must also be mindful to protect our tax base. While the Turnbull Government strongly believes that taxes should be lower, simpler and fairer, we also believe they must be paid.

To protect our tax base, we have demonstrated our diligence in ensuring all Australians, businesses and multinationals pay their fair share of tax.

Since the 2016-17 Budget, the Government has announced tax integrity measures that raise more than $5 billion over the period to 2019-20.

Our Multinational Anti-Avoidance Law alone is clawing back into the tax net $7 billion a year in sales from foreign companies operating in Australia.

We have also improved the integrity of the GST, a major revenue source for the States and Territories, by making sure foreign companies pay GST for online sales to Australians.

This not only provides extra GST revenue, it levels the playing field for Australian retailers.

And since July 1, foreign companies have been paying GST on digital products and services they provide to Australian customers. Within the first two quarters alone, revenue collections are almost what we had budgeted for the whole financial year.

The loopholes are being shut.

Earlier this month I announced the GST funding pool that is divided between the States and Territories had increased by $3.2 billion in the last year.

More than half of that increase - $1.85 billion - can be attributed to our tax integrity measures. These are funds, clawed back from foreign companies that are now going towards hospitals, schools, and housing and homelessness programs.

While we have had some significant wins by broadening the GST base to include more foreign companies, taxing the digital economy as a whole remains more of a conundrum.

We are seeing a big part of our tax base being ripped out of our country by the business models of global digital and social media companies.

Our international tax system was simply designed for a different time and a different economy.

This is increasingly acknowledged by the companies themselves.

Earlier this year I met with a handful of digital companies in Seattle and Silicon Valley including Google and Amazon, and there is an understanding that the current system that has benefited them greatly is simply not sustainable, nor palatable to the public.

Thankfully, Australia is not a pariah on this issue.

At the March G20 meeting of finance ministers in Buenos Aires, there was a deep understanding of the need to work collaboratively, not just with each other, but with the architects of the new economy.

We need their involvement, rather than their active resistance, to ensure our tax and regulatory systems are calibrated for the new economy.

So there are some big decisions being made in this area and we continue to work with other countries, and I will have more to say about this in the Budget.

In closing let me confirm that in this year's Budget we will be delivering tax relief to put more money back in the pockets of middle to lower income Australians to deal with their own household and family budget pressures.

We acknowledge that as our economy continues to strengthen and as our budget position is improving, many Australians have been doing it tough and many are yet to experience the benefits of that growth.

This is why it is important that when we consider any plan for tax relief, middle to lower income families will come first as part of any broader plan.

By prioritising these households with tax relief and not hitting those who are already carrying a significant tax burden, we believe we are getting the balance right.

As promised, we will do it in a way that is both affordable and responsible.

We will do it and stay on track to bring the budget responsibly back into balance which has been consistently projected for 2020-21 for five consecutive budgets and budget updates.

As a result, nor should this compromise our AAA credit rating. We are one of only ten countries that boast a AAA rating with all three rating agencies and we are not about to jeopardise that advantage.

We will be targeted and we will be measured. Action taken will be part of a broader plan. And we will deliver tax relief in the most efficient and affordable way. So expectations should be conditioned to these parameters.

It's simple, we believe the tax that you pay is your money. You earned it.

You're paying us, not the other way around.

A tax cut is not a welfare payment. It is not a give away as Labor and the high tax club seem to think. It is not the Government spending money. That is how Labor describe tax cuts, as expenditure. It tells you a lot about what they really think about your money.

Consistent with Liberal and National Party values, the Turnbull Government is for lowering taxes, Bill Shorten and the Labor Party are for increasing taxes. The choice now could not be more clear.

You will pay more under Labor.

We believe you should should keep the rewards of your hard work. This is an important principle upon which to build a stronger economy.

Lower taxes will further strengthen our economy to create more jobs and guarantee the essential services you rely on.

]]>‘Mining the Smart Economy’, Address to the AFR Banking and Wealth Summit, Sydneyhttp://sjm.ministers.treasury.gov.au/speech/005-2018/
Tue, 03 Apr 2018 23:37:34 +0000http://minister-sjm.tspace.gov.au/?post_type=speech&p=3667Of all the features of our Australian economy, the most impressive is its resilience.

A resilience anchored in the indefatigable will of an Australian people that refuses to be denied their prosperity.

The compounding effect of continued growth in the face of decades of economic upheaval, financial crises, globalisation, floods, droughts, commodity cycles and technological disruption has underwritten our modern wealth as a nation and as individuals.

Growth has been our goal and constant.

But recently, maintaining our growth through the momentous transition from our once-in-a-hundred-years mining investment boom has been arguably our most extraordinary act of economic defiance.

The importance of this fact cannot be understated.

At the G20 in Shanghai, I met with the former Chinese Finance Minister Lou Jiwei.

He was amazed that as a commodities sensitive economy, we were managing to emerge from our mining investment boom without going into recession. This was something he observed to me that few countries, if any, have managed before in their economic history.

Two years on, Australia’s successful exit from the mining investment boom eclipses passing through the GFC, not least because emerging from the GFC was aided and abetted by the upswing of our mining investment boom and external factors like the strong Chinese stimulus.

The truth is that Australia was not exposed to the same monumental impact of the GFC on our economic activity or the composition of our GDP as it did in other nations, where it was viewed in recessionary terms. In the United States, they refer to it as the Great Recession.

In Australia, the threat was to our financial system, which proved resilient, thanks to the prudential architecture put in place a decade earlier by Treasurer Costello and the sound management of our banks. In comparison to so many other countries, during the crisis our banks continued to lend. That is why we survived the GFC.

Compare this to the shock of the unravelling of our mining investment boom.

More than $80 billion of mining investment disappeared from our economy in the years following the peak of the boom in 2012; a colossal six per cent of our economy, that’s equivalent to the entirety of our iron ore exports. Gone.

The mining investment boom has also had a sizeable impact on wage growth. As Treasury research revealed last year, this was manifested by real consumer wages pitching above productivity levels, propelled by an income shock from rising commodity prices.

This was not normal. We were always going to have to return to normal as the boom ended. This has been part of the reason why wages growth has been so sluggish in recent years, along with spare capacity in the labour market and lower inflation expectations.

This also occurred when company profits were on average declining.

The normal transmission channels that linked wages growth and productivity in the Australian economy were rudely interrupted by the mining investment boom.

In dealing with this our Government was left with another major problem.

Unlike Labor who had the starting point of the Howard and Costello budget surpluses when they responded to the GFC, by the time the mining boom began to subside, Labor had left the fiscal cupboards bare.

Labor spent every cent on an egregious and ill-considered shopping spree of bad ideas that not only cleaned out the cupboards, but put our nation deeply into debt, spending the proceeds of a mining boom that was never going to last.

Labor had gone hard, gone households, and then gone was the surplus and all of our fiscal buffers.

So here we are now in Labor’s debt, literally.

We have patiently worked our way through these challenges with no help from Labor or the Parliament. Despite setbacks we have remained on track for a projected surplus in 2020-21 for five successive budget updates.

This has enabled us to so far keep our AAA credit rating.

We have also kept taxes as low as possible, while addressing tax sustainability and integrity issues and made the savings needed to keep Government spending under control. At 1.9 per cent, real spending growth is now at the lowest level of any Government in the last 50 years.

We are also no longer borrowing to pay for every day expenditure, for the first time in a decade.

Our borrowings are now raised to pay for critical infrastructure and defence spending, key components of our national economic plan, rather than pensions and unemployment benefits.

Thankfully, this difficult period is coming to a close and a new chapter is opening, as noted by the Governor of the Reserve Bank.

And we are seeing this in recent economic data.

While mining investment is bottoming, new investment in the non-mining sectors of our economy has returned, growing at 12.4 percent over the last year. Not that long ago, non-mining investment was going backwards by 8 per cent per year.

We have also seen an almost 10 per cent increase in investment in plant and equipment.

This is a baton change; an economy retooling and re-investing.

And this retooling hasn’t happened by accident. It is one that has been pursued, assisted and secured by the Government’s policies.

Our national economic plan for jobs and growth has been getting results.

Tax cuts and incentives for small and medium sized business, including new start-up businesses and family businesses.

A $75 billion national infrastructure investment plan that is building the runways, railways and roads Australia needs to remain competitive, and create jobs.

Record investment in Australia’s defence industry, creating jobs and supporting new high tech companies; and

Ensuring the Government lives within its means.

At the same time we have been guaranteeing the essentials Australians rely on, whether it is Medicare, hospitals or schools. And putting downward pressure on living costs with our National Energy Guarantee that will reduce power bills by $400 for households, or delivering tax cuts for first home deposit savings.

And we are keeping Australians safe, delivering on secure borders and protecting Australians from the threat of terrorism and gang violence.

While it is true that normal transmission in our economy is being restored, we also know that it will still take some time for the reception to be fully picked up in all areas of our economy.

That is why it is so important that we stick with the plan. We need these benefits to flow through, that is how you ensure no-one is left behind - by sticking to the plan.

Our economy is now entering a new chapter in which Australia is well positioned to prosper, but no one can take that prosperity for granted.

There is a lot to gain, but also much to lose, if handled the wrong way.

One of the key components of our national economic plan is our practical focus on science and technology that is transforming our way of life.

It always has, whether we like it or not.

The way we do business, the way we interact, has changed forever. It continues to be amplified by the sheer scale of digital adoption and the pace of technological change.

There is a reason for this. People like the benefits that these changes bring.

This will keep happening.

To secure Australia’s future, we must continue to adapt to be successful in this new economy - this smart economy - by mining its benefits and our own capabilities in science and technology, to ensure that Australians are not left behind.

And this is not just about white coats. It is about applying technology and research to our traditional economic strengths - mining, agriculture, the medical industry and financial services - to create and secure more real jobs in these areas and beyond.

For small business, it gives them the tools to grow their business, create jobs, sell and export more and, importantly, stay competitive.

I think Australians understand this. I think they know it’s true at a big picture level. But I also think many doubt that it will mean anything good for them and their job.

For many this just sounds like a list of threats to their job or the jobs of their children.

They are genuine fears. Fears of being left behind. Fears that this may be all ok if you’re a physics PHD or were born with an iPad in your hand, like younger generations, but not otherwise.

But the truth is, like the mining industry, the economic benefits of the new smart economy extend well beyond those who are directly employed in the science and technology field.

There are many rings of jobs that flow out from our success in science and technology. Like dropping a rock in a pond.

For example, how much more secure would your job be if you worked for a small business whose suppliers paid their bills on time. Advances in financial technology are already making this a reality. That will secure jobs.

Of course it is true that jobs are replaced by new technologies. But it is also true that value created by the new inventions and advances by Australians in science and technology can be just as valuable as what we dig out of the ground.

Just like minerals, they will bring wealth and incomes to Australia that will drive further growth in our economy, which means more jobs and higher wages right across our economy.

The Department of Industry, Innovation and Science estimates that product innovation across all businesses lifts turnover growth by 3.3 percentage points.

The OECD in 2015 attributed around 50 per cent of annual economic growth in its member countries to innovation alone.

Businesses that have invested in technology have also rewritten the rules and disrupted traditional markets and the share of profits.

McKinsey and Company estimates the share of company profits in developed markets that these nimble operators have snatched away from the big players is now more than 31 per cent - up from 17 per cent in 1999.

In considering the impact, we also need to update our thinking on where the jobs are in our economy.

Almost 80 per cent of Australians are now employed in service sector jobs.

This has more than offset the decline in routine manual jobs in manufacturing and mining that has largely occurred through automation and technology.

Growth in high-skilled creative jobs officially took the lead in the employment share in 2007 and has grown to occupy a 36 percent share of the labour market. Routine manual jobs represent around 30 per cent.

High-skilled creative jobs are paid around 40 per cent more on average than other jobs, and are growing at a faster pace.

Under the Government’s national economic plan, which includes a strong focus on science and technology, almost a million jobs have now been created, with more than 420,000 in the past year.

Of those, one in five, were created for men over the age of 55 - that’s more than 80,000 jobs. These are the workers that others said were supposed to be left behind.

This is just the beginning of what is being achieved from our national economic plan.

There will be more jobs where these came from if we stick to this plan and position Australia at the leading edge rather than the losing edge, in this new smart economy.

But to pretend there is a better way forward is to ignore reality.

Whilst acknowledging the angst, we cannot walk away from what is taking place around us.

Some will seek to play on people’s fears and tell them that they can stop all this and make things like they used to be.

I call this doona economics, just pull the doona over your head and hope it all just goes away.

Those who propose this are not on your side. This will not only cost you your own prosperity, but that of your children and grandchildren.

So beware those who say, what have you got to lose. The answer is plenty.

We owe our children better than the past. And the past was never as great as we sometimes romantically remember.

We are facing one of those ‘sliding doors’ moments.

Will we let our fears drive our choices. Will we play politics and indulge populism, and give our opportunity away.

If so, there are plenty of countries who will cut our lunch and steal our jobs, our wages and the investment that would otherwise come here.

As a Government, we made our choice some time ago.

To prepare our children and our current workforce for the future they will live in, not one imagined by sentiment, and build the infrastructure and policy support that will be needed to make this happen.

The Innovation and Science Australia 2030 Strategic Plan references the fact that Australia is currently competing in a $1.6 trillion global innovation race in which the winners not only increase their share of global wealth, but improve the living standards of their people.

Right now we are running in the middle of the pack. We need to move up through the field.

We are making progress but we have more work to do.

A feature of our commitment to science and technology has been our $1.1 billion National Innovation and Science Agenda released in late 2015, supporting businesses to cultivate their ideas, embrace risk and embark on change.

Nineteen of the twenty four measures have been implemented. A further three are pending the passage of legislation – namely access to company losses; intangible asset depreciation; and bankruptcy and insolvency reforms.

The two other measures are on track, but have longer timeframes for implementation, including the Square Kilometre Array radio telescope.

More than $700 million has been poured into funds that are commercialising research and focusing on high value areas like Biomedical science.

More broadly, we have opened up new avenues for innovation start-ups to receive capital funding from investors, legislating tax incentives for angel investors and early stage venture capital partnerships.

This has led to an 80 per cent increase in the amount invested through the government’s early stage venture capital program in innovative Australian businesses, that is around $300 million.

This is in addition to the more than 12,000 businesses whom the government has invested in through our research and development tax incentives, our CSIRO partnerships and Entrepreneur Partnerships.

These are high-tech businesses like Morse Micro that is creating the next generation of wifi chips, or Silicon Quantum Computing developing what its name suggests, with a special $25 million investment.

These are research firms like ProTA Therapeutics who are working to eradicate peanut allergies, Armaron Bio trialling drugs to prevent cell death resulting from heart attacks, or Colvera Clinical Genomics producing new technologies for the early detection of cancer in DNA fragments.

These are entrepreneurs boosting the potency of our agricultural crops, seeking advantages in energy storage and using our data to achieve better outcomes.

Our regulatory sandbox allows FinTechs to develop their ideas and test their products in a controlled environment, without jumping regulatory hurdles.

We have introduced an equity crowdfunding framework to help entrepreneurs raise the capital that will put flight to their bright ideas.

We are implementing Open Banking, putting power back in the hands of consumers by giving them unfettered access to their own banking data.

Just watch the start-ups and entrepreneurs flock to the market with innovative products that help consumers find a better deal, especially now the new payments platform is up and running.

This change, the establishment of a consumer data right, will be used as a beach head for a data-led revolution in a host of other key sectors, particularly in utilities, and especially electricity and gas.

While we recognise the need to invest in these critical fields, it is not about writing blank cheques to everyone that has a good idea. That is not the Government’s role.

Our involvement needs to be targeted to achieve maximum results.

This was the key message that flowed from the R&D Tax Incentive review which the government is carefully considering and will make our response to in the Budget.

The review included recommendations to improve the effectiveness and integrity of the programme, and improve research collaboration with businesses.

The Turnbull Government is committed to backing in R&D investment and the economic opportunities and jobs it generates. But it is also important to ensure that the taxpayer’s significant investment in R&D, through this incentive, is generating maximum benefit for the economy and the Australian public.

This is not a tax incentive for business as usual. This incentive has been taken for a ride by some and integrity needs to be restored.

It is not a tax concession designed for businesses to exploit as a proxy for achieving a lower tax rate. We agree that the corporate tax rate should be lower to create jobs. That is one of the problems with having a higher tax rate, it encourages the mining of tax incentives by large firms. But lowering the tax burden on business should not be achieved by allowing arbitrary use of tax incentives, it should be done by cutting the rate.

Our focus is to relaunch an R&D tax incentive that is all about R&D additionality, things that would not have happened anyway, and rewarding the intensity of that effort.

Finally, just like in the old economy, in the smart economy no-one gets rich selling things to themselves.

In Australia, companies that look beyond the domestic economy and export are upwards of 10 per cent more likely to innovate.

Australia’s manufacturing sector knows these principles well, having been forced to refocus and reinvent themselves after a difficult period post the end of the commodities boom when their profits margins were brutalised.

Wise manufacturers recognised an emerging opportunity to not only create high-tech finished products, but add value throughout the global supply chain.

Consider the case of Textor Technologies, a Melbourne-based manufacturer supplying textiles for local car manufacturers.

Instead of walking to an inevitable end, they invested $17 million to upgrade their automation facility and used the government’s innovation tax incentives to ramp up their research and development, collaborating with the CSIRO to develop 3D moisture-trapping fabric.

That fabric is now used in the millions of nappies that are churned out of factories in Sydney, the United States and across Russia.

From Holdens to Huggies.

Textor Technologies now manufacturers 100 million square metres of fabric each year and exports its own raw product across the Asia-Pacific.

This is why we have been pursuing export trade agreements with our major trading partners - to accelerate the export opportunities for our firms and boost jobs and growth.

We have negotiated key trade deals with China, South Korea, Japan, together with our ground-breaking TPP which opens the trade doors right around the rim of the Pacific.

Our trade engagement is based on securing win-win outcomes, as was recently demonstrated in our arrangements with the US on steel and aluminium.

This enormous opportunity also puts the onus on our own SMEs to get digital and expand their horizon beyond their own bricks and mortar.

Around 15 percent of global goods are sold through e-commerce giants Amazon and Alibaba alone; acting as the perfect launching pad for entrepreneurs to get their product to the world quickly and efficiently.

A greater adoption of digital technology has the potential to increase Australia’s economy by 0.7-1.2 per cent.

Conclusion

Going forward our task is to keep investing in science and technology as it remains a key part of our national economic plan for jobs and growth.

The Australia 2030 Innovation Plan we commissioned provides an important guide to direct our next steps.

Investing in the national research infrastructure that provides the platform and building blocks for research and development more broadly in the economy, from both the private and public sector.

Investing in supporting Australians to be successful in the new smart economy - through our entrepreneurs programme, supporting small business to embrace new digital technologies that can help their business and our transition to work programs that help Australians gain the skills they need as the economy changes.

Continued investment in the science, technology, engineering and maths - or STEM - education of our children, especially girls, so they are equipped to deal with the even more advanced world they will live in.

Continue to leverage science and technology in the areas of our strength and greatest opportunity, whether that be in agriculture, resources, health or financial services.

Continue to foster the collaboration between business, entrepreneurs, research scientists, students, government agencies, universities and schools as a part of a natural, vibrant and self-propelling innovation ecosystem.

All of these measures are creating the jobs that Australians will rely on both now and in the future. And, as part of our national economic plan for jobs and growth, we are committed to secure those jobs and thereby secure Australia’s economic future in this new smart economy.

To realise these jobs and ensure the benefits flow through our economy and leave no one behind, it is important that we stick to the plan.

]]>Address to the International FinTech Conference, London, United Kingdomhttp://sjm.ministers.treasury.gov.au/speech/004-2018/
Thu, 22 Mar 2018 11:19:25 +0000http://minister-sjm.tspace.gov.au/?post_type=speech&p=3627Thank you Chancellor for that warm introduction.

It’s great to be here to talk about the close relationship that exists between Australia and the UK.

And today we commit to even closer collaboration through the official signing of the UK – Australia FinTech Bridge.

In the true sense of the word, the Bridge helps us overcome obstacles, enabling closer partnerships between governments, our regulators and the FinTech industry.

Under the FinTech Bridge we will work to identify emerging trends, share policy developments and position firms for the challenges of entering a foreign market.

Importantly it presents FinTech firms on both sides of the Bridge with a fast track to pursue international expansion and hit the ground running.

Australia’s significant relationship with the UK is underpinned by our shared heritage, common values, closely aligned strategic outlook and interests.

We are like-minded on pressing global issues, including international security, the need to keep the doors open to trade, multilateral cooperation and pro-growth economics.

Our economic and trade bonds, forged over decades, is an enduring feature of our relationship, with the UK Australia’s fifth largest two-way trading partner, our fifth largest export market and our sixth largest source of imports.

Two-way trade was worth over $29 billion in 2016.

The opening of new opportunities in the FinTech sector through this Bridge will not only bolster this strong trade relationship.

It will provide exciting new opportunities for trade and investment into the future, in an ever increasingly digital world where innovation and competitive edge are paramount.

Australian FinTech firms will have the opportunity to grow their business by accessing the UK market. Similarly, UK firms will have easier access to Australia and the unparalleled opportunities that reside a step away in South-East Asia, the fastest-growing internet market in the world.

Thanks to the support of Austrade and the UK’s Department of International Trade, the Bridge will give businesses tailored assistance to navigate the complexities of operating in a foreign market, such as connections for legal, regulatory and practical advice about setting up between the two markets.

These agencies will give FinTechs a networking leg-up, while a collaboration between FinTech industry groups will facilitate stronger business-to-business links in the sector. This is a critical aspect needed to foster development in this fast-paced sector.

Industry bodies will lead business-to-business discussions on the challenges of entering the other market and provide views to governments on other FinTech policy issues such as blockchain, RegTech and data exchange.

In the regulatory area, our securities regulator, ASIC, and the UK’s FCA will also make it easier for FinTech start-ups to test their ideas by facilitating access to each country’s regulatory sandbox and providing assistance through their innovation hubs.

ASIC and the FCA will also explore opportunities for quicker licence processing for FinTech firms that are already licenced or authorised in the other country.

But we cannot discount the great collaboration already underway. In March last year, for example, the Commonwealth Bank of Australia’s London Innovation Lab and Austrade signed an agreement to support innovation exchange and investment between Australia and the UK.

In February this year, ING and CBA undertook a RegTech pilot in collaboration with FinTech firms and the FCA in London which demonstrated the potential for artificial intelligence and natural language processing in order to simplify the ways businesses meet their regulatory compliance obligations.

FinTech is not an afterthought in Australia. It is front of centre in our national economic plan to boost jobs and growth; giving innovative businesses the encouragement and means to become leaders in a global marketplace where speed, simplicity and scale are non-negotiables.

We recently introduced legislation to enhance our successful regulatory sandbox by broadening the scope of products and services that can be tested. This will put in place the world’s most forward leaning regulatory sandbox.

We have just welcomed a New Payments Platform - making payments faster and simpler for consumers and businesses. Not more waiting over the weekend to have your payments processed.

We have made it easier for entrepreneurs to raise capital by introducing an equity crowdfunding framework and extending the investment opportunities to proprietary companies.

This development will open up new capital markets for small businesses and start-ups who may face difficulty accessing traditional sources of funding.

And we are implementing Open Banking to give consumers access to their data and throw open the doors to competition within the lending market, a process that is already underway here in the UK.

Armed with their own data, consumers will be able to seek out a better deal on their banking products, through their own volition or through an innovative third party.

This focus on FinTech is already bearing fruit.

Australia was ranked 5th in the 2017 EY FinTech Adoption Index, and we have seen the number of FinTech start-ups increase from less than 100 in 2014 to almost 600 last year.

We have also seen the development of an active network of FinTech hubs, start-up incubators and corporate innovation and accelerator programs.

It is also increasingly diversified – the sector is picking up credit, payments and digital currencies and now extending to include RegTech, data and analytics, and personal finance management.

FinTech investment in Australia has also remained strong, with investment of around US$200 million in 2017.

One example is ZipMoney, an ASX-listed deferred payment provider which has secured partnerships and funding from two of Australia’s largest banks; with a $40 million investment arising from a partnership with Westpac and a further $200 million debt funding deal from NAB.

Importantly, we have a stable and supportive regulatory system, offering an attractive market for the launch and expansion of FinTech products.

So as you can see, the Australian Government continues to respond to the rapid development of FinTech. We’re working constructively with industry leaders and regulators to ensure we provide every opportunity for FinTech firms to succeed.

Our collaboration with the UK through the FinTech Bridge adds another exciting dimension to Australia’s approach to fostering global cooperation on FinTech.

But it doesn’t stop with us – Australian and UK financial regulators are reaching out to regulators all over the world to deepen engagement.

The Chancellor and I have just returned from the G20 summit in Argentina, where discussions recognised the global nature of FinTech.

Collaboration in financial services and financial technology is changing the world.

I believe the UK – Australia FinTech Bridge will deepen our countries’ positions as world leaders in FinTech.

The FinTech Bridge encourages and facilitates not only new FinTech businesses, but the revolution in consumer experiences that come from financial technology.

I am passionate about FinTech, as is the UK. I look forward to this new and exciting opportunity in our digital future.

Thank you.

]]>Address to the ASEAN-Australia Business Summit, Sydneyhttp://sjm.ministers.treasury.gov.au/speech/003-2018/
Sat, 17 Mar 2018 05:55:07 +0000http://minister-sjm.tspace.gov.au/?post_type=speech&p=3617Thank you, it's an honour for the Australian Government to host this Summit. Not only is this event unparalleled in Australia, it's yet another sign that our commitment to trade is central to our national economic plan to drive jobs and growth in Australia - backing in businesses to create jobs, invest and expand their operations at home and abroad.

ASEAN operates under the motto of one vision, one identity, one community — principles that have served ASEAN well, creating many opportunities across a myriad of fields, over many decades. In fact, some 50 years after ASEAN was established, economic opportunity is one of the driving forces bringing us here today.

It's an unprecedented opportunity for our region's most senior and influential business leaders to put forward recommendations to drive the ASEAN-Australia economic relationship forward.

We see ASEAN carrying real weight, equivalent to the world's fifth largest economy with the region's annual growth outpacing the global average. At the same time, Australia's economy continues to strengthen, bolstered by a year of record jobs growth and a buoyant sense of optimism from businesses and consumers.

It's a combination that bodes well.

The opportunities on both sides of the ledger are profound; opportunities for South East Asian businesses to invest in a strengthening Australian economy that continues to broaden its base and champion innovation and digitisation.

And equally, for Australian businesses to set their sights abroad and invest in a dynamic and burgeoning South East Asian economy, and continue to strengthen the already close ties between our nations and business communities.

Australia's strong economic management, a policy focus on innovation and an overall ease in doing business present many opportunities for ASEAN businesses.

The Australian economy has entered its 27th year of uninterrupted economic growth.

This impressive growth story has been maintained through the Asian Investment Crisis, through the bust of the Dot Com Bubble, through the Global Financial Crisis and, by far more significant for Australia, through the significant downturn from our own mining investment boom.

Growth has been our constant.

Through the unwinding of the mining investment boom, our economy has not only proven resilient, it has diversified.

Non-mining business investment has surged an estimated 12.4 per cent over the last year, as businesses - who are enjoying some of the best trading conditions in decades - grab a hold of new opportunities to grow and innovate.

This surge in business optimism and investment led to record jobs growth across Australia in 2017 - with over 400,000 new jobs created in the calendar year, including 300,000 full-time jobs.

And the trend is continuing in 2018 - jobs and growth.

This optimism in our economy is also widely shared by Australian households. In our national economic accounts for the December quarter, consumption rose strongly, recording the best fourth quarter result in seven years.

Momentum is certainly building within the Australian economy, which gives us great confidence for the year ahead.

Our delivery on jobs and growth, together with our fiscal discipline, has resulted in Australia maintaining its AAA credit rating with all three major ratings agencies - one of only 10 countries to achieve such.

As a nation, we boast a skilled workforce and world-class education and research institutions, as we continue to establish Australia as a regional hub for ASEAN students with more than 100,000 studying here in 2017.

Our economy also offers regulatory and policy certainty. In fact, we are ranked 14th overall on the ease of doing business. This is underpinned by strong institutional frameworks — a hallmark of our system.

On the policy front, the Turnbull Government is pursuing and encouraging growth and investment.

We have legislated small and medium business tax cuts for businesses with a turnover less than $50 million and we continue to pursue tax cuts for the remainder of our businesses - to ensure they are competitive in a world embracing lower corporate tax rates.

Like ASEAN, our economic policies are unashamedly pro growth as we seek to encourage businesses to invest, innovate and create jobs.

We welcome foreign investment and appreciate the role it plays in spring boarding us to higher rates of economic growth, employment and a higher standard of living.

By the same token, Australia has realised enormous benefits from pursuing economic openness and advocating for free and open markets.

We will continue down that path. We will pursue policies that benefit our country, and resist calls to implement policies that would close access to our economy.

ASEAN is collectively one of Australia's largest export markets, worth around $42 billion (or 11 per cent of Australia's total exports) in 2016-17. Over the last ten years, the value of two-way trade with ASEAN has grown by more than 40 per cent.

There are also opportunities for Australian businesses in ASEAN — real possibilities stemming from four factors dramatically transforming the region's place in the world.

Today, I'd like to focus on digital transformation because it's an area where I see some major developments occurring especially in the financial sector.

South East Asia is the fastest-growing internet market in the world, with projections suggesting there will be around 480 million internet users by 2020.

This, of course, means incredible demand for mobile banking and payments, online purchases and other mobile-enabled transactions and services.

We live in a time where the pace of change is nothing short of extraordinary.

A Department of Foreign Affairs and Trade report says in some of ASEAN's developing economies, where many have never had a bank account, people are now catapulting straight into using mobile money transfers and other modern banking solutions.

That's why we're looking to unlock potential and create an environment where Australian FinTechs can compete internationally - because the possibilities are extraordinary.

Embracing financial disruption through innovation is a fundamental part of our national economic plan.

And we are building off a solid platform. Australia ranks fifth in the world in the 2017 EY FinTech Adoption Index. But this is only the beginning.

In 2016, I set up a FinTech Advisory Group to advise me on the reforms to keep us ahead of the pack. And we've been working methodically through implementing these actions.

We have a regulatory sandbox to support testing of FinTech developments, and have introduced legislation to enhance the scope of products and services that can be tested. This will put in place the world's most forward leaning regulatory sandbox.

We've just welcomed a New Payments Platform — making payments faster and simpler for consumers and businesses.

We've introduced an equity crowdfunding framework — knocking down regulatory barriers to enable Australian entrepreneurs to raise the capital they need to turn ideas into successes.

We're implementing Open Banking, which will not only give consumers the right to safely share their data but could also lift the lid on competition.

As well as putting the FinTech building blocks in place, the Government also committed to making it easier for Australian investment funds to do business in Asia.

Australia is one of five signatories to the Asia Region Funds Passport which will allow funds managers to offer their products in each member economy without having to go through duplicative approval processes.

Thailand is also a participant in the Passport and ASEAN has its own initiative — the ASEAN CIS framework.

Together these initiatives are welcome efforts to expand opportunities for investment and export of financial services in the region.

So to finish, I'm pleased to announce a few practical measures to make sure Australia and ASEAN are ready to seize opportunities for growth and respond to challenges that may come our way.

The new ASEAN-Australia Infrastructure Cooperation initiative will develop a rolling priority pipeline of infrastructure projects.

The initiative will support ASEAN infrastructure projects that are well-designed, offer significant value to the region, and are open and transparent.

The ultimate aim is attract private and public investment and improve regional connectivity because ASEAN needs $4.3 trillion in infrastructure investment by 2040 to maintain economic growth.

To complement this initiative, all ASEAN member countries will now be able to link into the Global Infrastructure Hub Project Pipeline.

In other words, it's a foot in the global infrastructure investment door.

It means ASEAN countries will be able to access the hub putting their infrastructure projects in front of a larger field of international investors.

Today, I also announce my department — the Australian Treasury — will lead a new series of workshops where Australian experts will exchange knowledge and share experiences on matters that are most relevant to ASEAN countries.

These are not one-size-fit-all workshops. Treasury will tailor the workshops to suit the priorities of members with topics likely to include taxation, regulatory reform and budget policy.

The workshops will continue a proud tradition of collaboration, further entrenching the links between our people and institutions.

Given the possibilities and optimism on show during this Summit there is no doubt ASEAN will be part of Australia's economic future and vice versa.

There's many opportunities to discuss today and long after the Summit draws to a close, I'm sure ASEAN and Australian businesses will continue to drive prosperity in our region.

Thank you for your contribution to this Summit.

]]>‘Realising our year of opportunity through lower taxes and more open and competitive banking’, address to the Citibank A50 Australian Economic Forum, Sydneyhttp://sjm.ministers.treasury.gov.au/speech/002-2018/
Fri, 09 Feb 2018 01:54:44 +0000http://minister-sjm.tspace.gov.au/?post_type=speech&p=35022018 is a great year of economic opportunity for Australia, for Australian businesses, and for investments in Australia.

In the past 12 months, the Australian economy has delivered solid growth, entering its 27th year of uninterrupted economic expansion, while diversifying its base as the non-mining economy continues to strengthen.

We have witnessed extraordinary jobs growth that smashed records across the board - with more than 400,000 Australians getting a job in 2017, and more than three quarters of those full-time positions.

Businesses are buoyed by the tangible optimism within our economy and encouraged by improved business conditions that are stimulating growth and spurring investment.

And of course, empowered by a government that is prepared to back our businesses; willing for them to succeed.

Consumer confidence has strengthened with the most recent monthly survey showing consumers were more confident than at any time in over four years, encouraged by the strength of our labour market and a sense of optimism about the economy.

Clearly, there is a formidable platform for the Australian economy to launch into 2018, building upon the momentum that stirred throughout 2017, and deliver better days ahead for households and businesses.

Today, I want to provide you with an overview on what we are doing to continue to secure our opportunities.

The critical importance of last year's record growth in jobs and the effect it will have on the economy and wages cannot be understated.

More than 1,100 jobs every single day, more than 300,000 of those jobs full-time. The records kept tumbling: the strongest calendar year result in over 40 years, the strongest calendar year growth in full-time jobs on record, the equal longest run of consecutive monthly jobs growth in history.

And a record that the Coalition Government should be most proud of - 956,500 jobs created since we first came to office.

This strength in jobs growth is eating into the slack in the labour market.

A continued tightening in the jobs market will see upward pressure, once again, placed on wages, as Dr Lowe reinforced again last night.

In sectors such as health care and education, where jobs growth has been considerably strong over the past few years, wages are growing faster than the national average. More than 100,000 jobs were created in the health care sector through the year to November, so it shouldn't come as any surprise that wages in the sector are growing at 2.7 per cent, compared to the national average of 2 per cent.

Normal transmission on supply and demand in the labour market is being restored.

And we are beginning to see the same pattern replicated in the services sector, with this week's AIG Performance of Service Index measure of employment accelerating to its highest level since December 2004.

In fact, this strong labour demand within the sector is reportedly leaving specialised fields with skill shortages, increasing the pressure on wage growth. The rubber band is getting tighter.

In recent months, we have seen this tried and true principle at work in the US. After a sustained period of strong jobs growth, wages in the US are starting to see some promising upward movement. Average hourly earnings growth in the year to January grew at 2.9 percent – the highest rate since June 2009.

Although it has big shoes to fill, 2018 is getting off to a good start.

Job ads jumped 6.2 per cent in January to be 13.8 percent higher over the past year.

This is the highest level of job ads since April 2011 and the best start to a calendar year since 2011.

Similarly, the NAB Quarterly business survey yesterday showed that the employment expectations subindex has risen to its highest level in almost a decade.

The show goes on.

The same could be said for non-mining business investment which dusted itself off last year to become a major contributor to economic growth, together with strong public final demand and exports.

The NAB quarterly business survey showed that expected new capital investment is at its highest level in over a decade.

Non-mining business investment is forecast to grow at a solid five per cent pace in both 2017-18 and 2018-19.

New private business investment is growing at the strongest rate since the peak of the mining investment boom in 2012, expanding by 2.0 per cent in the September quarter and 7.5 per cent through the year, to eclipse the 20 year average.

As I announced in the mid-year economic update, real GDP is expected to lift from 2.0 per cent in 2016-17 to 2.5 per cent in 2017-18 and three per cent in 2018-19.

This strengthening local economy is supported by a global economy that continues attract a steady stream of upward revisions from the folk at the IMF and World Bank, with the former now forecasting 3.9 per cent in 2018 and 2019, have edged their predictions 0.2 per cent page points higher already this year.

This is all evidence that the policy settings we have in place and continue to pursue, are encouraging growth and investment. That's our plan, it's working and we are sticking to it.

If we are to secure the opportunities ahead, we have to fight to keep our businesses competitive in the global economy.

Uncompetitive tax rates are a drag on economic growth.

Similarly, businesses cannot pay workers more, when the Parliament insists on them continuing to pay the Government more in higher taxes. This only leaves Australian workers being left out.

Making businesses pay higher taxes only makes it harder for the benefits of a growing economy to pass through to wage earners. It holds back the pay rise that Australians have been looking for, it delays it even further.

Labor and the Parliament's refusal to support lower taxes means Australian workers will be left behind on wage rises, as the jobs and the wage rises they should be getting get sent to the Government in continued higher taxes, and also go offshore.

Australian workers will continue to be short-changed on wages by Labor and our Parliament's insistence that businesses pay Governments more rather than enabling them to pay their workers more.

It is often said to me, 'tax cuts for business are not popular'. That may cause the Labor Party to lose their economic nerve, to discard their core belief and 'wibble wobble' on their conviction for what is good for the economy.

But what I do know is that more and better paid jobs is both necessary and popular.

As a Government, you have got to be prepared to do the things that achieve the right economic outcomes, and not go to water the first time that someone makes a criticism of your policy. This government will not relent to that.

Over our summer, the case for lowering business tax has been boosted by President Trump's extensive tax reform programme.

The tax cuts have had a profound impact on the psychology of the business community, given the extent of the reform that passed the Senate that perhaps surprised on the upside.

In travelling through the US last week, the shift in sentiment was palpable and the results were clearly evident: companies restructuring and simplifying their systems. Businesses investing more in their employees, offering pay rises and bonuses. Corporations pledging to invest more money on innovation, R&D and technological advancement.

The benefits are real. Ask the millions of American workers who have a pay rise secured in recent weeks, or have held a bonus cheque in their hands.

The IMF last month confirmed company tax cuts would be a key driver for the US economy, and upgraded its global growth forecasts accordingly.

Professor of Economics at UNSW Business School, Richard Holden, citing a new empirical study published in the flagship American Economic Review, noted that "cutting the Australian company tax rate from 30 per cent to 25 per cent is not just good for business, and workers. It also helps redress economic inequality.''

"The benefits to workers,'' Professor Holden said, "tend to flow disproportionately to women, young people and the less skilled.''

This week we secured passage of the remainder of our enterprise tax plan through the House of Representatives.

Labor now have the chance to do the right thing, do what they used to believe in and back the only jobs and growth plan in the Senate that will increase investment, wages and jobs.

Another key part of our plan to ensure Australians can grab a hold of their own economic opportunities, is ensuring that our banking and financial system is as competitive as it is resilient.

That is why as a Government we are embracing financial innovation and disruption in our national economic plan.

There is no question Australia's banking and financial system remains both strong and resilient, a testament to the prudential measures employed to strengthen the sector and ensure it can once again, like it did a decade ago, stand tall in the face of a global financial crisis.

But while ever there remain barriers to new entrants, while ever power is shared by the few and not the many, and while ever innovation is not championed, the customer loses out and so does our economy.

Since elected, the Turnbull Government has delivered a raft of reforms geared towards unlocking greater competition in the banking and financial sector, to give Australians more choice and more opportunity to get a better deal on their loans and products and to access the finance and capital they need to realise their economic objectives.

This week saw the successful passing of our Banking Measures Bill through the House of Reps - a significant milestone on the pathway to a stronger and more competitive banking sector.

One of the pillars of the bill was to allow wider use of the term 'bank', giving all Authorised Deposit-taking Institutions (ADIs) the opportunity to officially market themselves as a bank and compete on fairer terms with our current banks.

Not only will this allow these smaller lenders to attract more customers, it will open up the lending market to a raft of innovative new players.

They won't be your traditional bricks and mortar banks or credit lenders but they will still be regulated. Perhaps online platforms and tech start-ups capable of offering competitive rates and prices on banking products will put pressure on the incumbents to match or better, or lose customers.

Off the bat, that gives the green light to more than 55 current Australian lenders to call themselves 'banks', let alone the new online lenders that will take advantage of the change and set up shop.

Our moves to bolster, create room for, and champion Australian FinTechs will also be pivotal in boosting competition in the financial sector.

Australia punches above its weight on FinTech, ranking fifth in the world in the 2017 EY FinTech Adoption Index, proving we have fertile soil for innovators and creatives to not only survive, but thrive.

Digital disruption in financial services is changing the world, and importantly, that means putting power back in the hands of consumers.

Costs are coming down, speed and efficiencies are going up, as FinTech's continue to interrupt and push the establishment at pace with the creation of innovative peer-to-peer lending platforms, RegTech, data and analytics and personal finance apps.

Our enhanced regulatory sandbox, introduced in new legislation this week, will provide FinTechs with a place to safely test new financial products, we are supporting blockchain technology to drive innovation, and we have legislation before Parliament to extend crowd-sourced equity funding to proprietary companies, in addition to public companies legislated last year.

Competition is also being fostered through the Government's $1.1 billion National Innovation and Science Agenda, with 19 of the 24 measures having been implemented.

Showcasing our commitment to increasing competition through innovation, NISA has poured more than $700 million into innovation funds that are investing in companies that are busy creating the next generation of technology and innovation breakthroughs.

I'll give you a few compelling examples:

Our investment in Morse Micro to build the next generation of Wi-Fi chip, through the CSIRO Innovation Fund which aims to commercialise our research.

Our investment in Silicon Quantum Computing to support the development and commercialisation, as the name suggests, of silicon quantum computing technology.

Our $75 million investment through the CSIRO to help Data61 look for opportunities for Australians to capitalise on the data revolution, and

Our grants to smart SMEs to harness innovative ideas and help them take it to the market.

As part of the broader NISA agenda, we have legislated tax incentives for angel investors and venture capitalists which we recently enhanced by allowing innovative financial service businesses to access these sources of funding, to get our innovative start-ups over the hump.

These are all liberating measures for our economy.

Yesterday, I released the exposure draft legislation for the mandatory comprehensive credit reporting regime - a game changer for consumers, leading to better deals on mortgages, personal loans and business loans.

And a game changer for increased competition in the sector.

The major banks will be required to report 50 per cent of their credit data - both positive and negative data - by July 1, increasing to 100 per cent a year later.

This transparency will open up the lending market to new players by enabling them to better assess the credit risk of customers and at the same time reduce their exposure to defaults.

The lenders will be able to calibrate their lending according to risk.

We are also recognising the role of customer owned banks and credit organisations, giving them the ability to raise capital and provide another avenue for competition.

That was yesterday.

Today, I am launching the Report I commissioned into Open Banking.

Open Banking will revolutionise the financial services sector, completely transforming the way Australians interact with the banking system, by giving consumers the right to share their data with other banks, other institutions and innovative FinTechs and get themselves a better deal.

After all, it's your data. You deserve the right to maximise its value and use it to your advantage.

Granting third-party access to your data will allow rival providers to offer competitive deals, products that are tailored to your needs, and enhanced services that meet the customer where they are at.

Banks won't be able to afford to take customers for granted, and lock other competitors out. Innovate or watch your customer walk out the door, armed with their data.

This disruption to the major bank stronghold on data will make the process of switching between banks less painful and help overcome the 'hassle factor' that sees customers stay with their current bank even when there are better deals on offer. Importantly, Open Banking will lift the lid on competition and encourage a new wave of FinTech innovation and product development.

Mobile apps that allow customers to not only manage their finances, but get real-time budget and investment advice from experts over live chat. Real-time product comparison services.

And a dramatic shift in customer experience, with nimble FinTechs capable of offering more intuitive interfaces, personalised services and tailored products.

More choice, more competition, more innovation, more inclusion.

Having committed to introducing Open Banking in the 2017-18 Budget, I asked Scott Farrell to report on the best way to put in place an Open Banking framework in Australia.

Mr Farrell and his team have prepared a first-class report, which maps out a practical and sensible model that is positively customer-focused and encourages competition.

Critically it spells out the need to build strong safeguards that protect customers' privacy and give Australians confidence in the system.

The report suggests that "markets work most efficiently when: customers are informed; there is transparency in pricing and in the quality of available products and services; there is a level playing field between competitors; and where the costs of switching between providers and barriers to entry for new providers are low''.

Open Banking seeks to reduce those barriers.

One of the most pleasing aspects of the report is the acknowledgement that Open Banking is likely to make life easier for small businesses, who often have less documentation and shorter financial histories that inhibit their chances of securing a competitive loan.

"A bank that has an established relationship with a small business,'' the Open Banking Report states, "is at a significant advantage over its competitors in the supply of data-related services.''

The review makes key recommendations on the scope of the model, and suggests banks supply at the request of the customer not only the data that has been provided to them by a customer, but all their transactional data and potentially outcomes of identity verification.

As well as increasing their ability to get a better deal or have products tailored to spending habits, giving customers the ability to share their transaction data with another party will ease the process of applying for new loans and credit cards.

Any data that has been enhanced by insights and analysis should not be included in the scope of Open Banking, the report suggests. The Bank has done the heavy lifting on this data, and deserves to keep it for its own commercial gain.

Which leads us to who should be required to share the data, and with whom.

The review suggests all ADIs other than foreign banks should be captured by the regime, and due to transitional costs that may disproportionately affect smaller players, participation should be phased in, starting with the major banks.

Subsequently, it only seems fair that all ADIs should be automatically accredited to receive data under Open Banking. If customers trust you to deal with their money, they likely trust you to deal with the data about their money.

For non-ADIs and new entrants to the market, the review suggests a graduated, risk-based accreditation standard to be employed, based on stringent security and governance rules. And going to my point on fairness before, if you are approved to receive data, you should be obligated to share data when asked by your customer.

Perhaps the most significant opportunity goes to implementing Open Banking as part of the broader Consumer Data Right.

That is significant because it's a first for Australia — a trailblazer for other sectors.

As Mr Farrell said in the report, banking is not the only sector where customers stand to benefit from greater data sharing, with the Government looking at customer-driven data access being extended to energy and telecommunications.

A successful adoption of Open Banking could also lead to `write access' reforms, where third parties would be able to make payments from a customer's account on the customer's behalf - similar to the reforms we have seen in the EU's PSD2.

This would open up the possibility of peer-to-peer payment platforms that bypass traditional banking platforms, with money transfered simply by sending a text message; and services that integrate multiple accounts from different banks on the one interface.

And of course there is the obvious link between Open Banking and the development of comprehensive digital identities.

The Turnbull Government recognises this potential beyond Open Banking and, in November last year, we committed to legislate the Consumer Data Right following the Productivity Commission's recommendation.

So as you can see, this is a great opportunity to put the Australian consumer exactly where they belong - at the centre and in control; and I'm delighted to invite comment on the report's recommendations on Open Banking.

In conclusion let me simply say that the Turnbull Government has a strong economic plan for jobs and growth that is getting results.

We will continue to stick to our plan for jobs and growth, because we know that it will continue to deliver the results that will enable Australians to realise their opportunities in 2018 and justify the investments that have and continue to be made in our economy.

The Coalition has always had a strong compass when it comes to issues of economic management and the Turnbull Government is no different.

We will stay the course.

]]>Treasury Laws Amendment Enterprise Tax Plan (No. 2) Bill summing up speech, the House of Representativeshttp://sjm.ministers.treasury.gov.au/speech/001-2018/
Thu, 08 Feb 2018 02:47:59 +0000http://minister-sjm.tspace.gov.au/?post_type=speech&p=3490Firstly, I thank all the members who have contributed to this debate. This Bill delivers on the remainder of the Government's Enterprise Tax Plan introduced in the 2016-17 Budget.

The first element of that plan, which has been previously legislated for firms earning up to $50 million in turnover each year, was a watershed change for businesses around this country, particularly for small businesses earning between $2 million and $10 million in turnover each year.

Not only does that reduce the tax rate for those businesses but it also provides businesses that have a turnover up to $10 million access to the Small Business Tax incentives: the instant asset write-off, pool depreciation and GST on a cash flow basis.

All of these are important measures that assist genuine small businesses which, this Government believes, are businesses with a turnover of up to $10 million. That is a different view to those who sit opposite.

The Labor Party believe a small business should only be defined as a business earning up to $2 million.

The Henry Review suggested it should have been up to $5 million, and we thought it should go further than that. A business earning up to $10 million can have some 22 employees. It is not Google or Microsoft or any of those sorts of businesses—they're genuine small businesses which we find in all of our electorates.

This Government provided those businesses with the most significant tax relief that those types of businesses have ever seen, because we understand small businesses. We know what a small business is. We know where they are, we know what they need, we know the support they need and we know the recognition they need.

That's why we legislated tax relief—tax cuts—for small businesses, and the Labor Party opposed it. We know, because the Labor Party have said—in relation to these measures and in relation to the $65 billion of estimated revenue impacts over the 10 years, which includes the tax relief to not just businesses earning between $2 million and $10 million but businesses all the way to zero in turnover—that they have factored that into their costings.

They've spent all that money and they still have a deficit which is greater than what the Coalition put forward at the last election. They spent all that and then spent more and then had an even worse fiscal position.

It's clear that the Labor Party, if they are elected at the next election, have factored into their costings the reversal of tax cuts for small and medium-sized businesses. The Bill that's now before the House would see the next cab off the rank—businesses earning between $50 million and $100 million—get a tax cut.

It's bad enough that the Labor Party would deny those businesses that. Again, they're not multinationals or even big domestic companies necessarily but businesses in South Australia, businesses in Tasmania—businesses all around the country—that are modest, growing and hungry businesses that want to put more and more Australians into jobs. I cannot understand how keeping taxes high for these businesses helps them employ more Australians or boost their wages. It doesn't make any sense.

I know there are plenty of critics of the Government's plan that we have consistently held to, that we took to an election and that we won an election on; it was confirmed by the Australian people.

I know that. But what of the question put to the counterfactual? How on earth does keeping business taxes high help one business employ one more Australian or give one more Australian a wage rise or help them invest one more dollar in their business—in plant, in equipment, in technology, in training, in developing new products or in going after new markets?

Keeping business taxes high is a complete numpty of an idea. It doesn't make any sense. Anyone who thinks that's good economic policy has absolutely lost their economic compass and cannot find their way around the economic debate in this country.

We're putting forward the continuation of our plan to continue to drive the jobs and the growth that we are seeing. Last year over 400,000 jobs were created. That was a record year for jobs growth, eclipsing all others since records were first taken for jobs in this country.

It is stronger than the Rudd-Gillard-Rudd Government's best years, stronger than the Howard Government's best years, stronger than the Keating Government's best years, stronger than the Hawke Government's best years, stronger than the Fraser Government's best years and stronger than the Whitlam Government's best years—the strongest jobs growth on record.

It's part of a plan. It's not the whole plan. There's our $75 billion infrastructure investment, which we know is equally, for similar reasons, supporting investment in our economy, supporting growth and supporting the case for strong wage outcomes for Australians. There's our investment and stickability when it comes to the issue of opening up new markets through trade.

That's something the Labor Party used to believe in but, like everything else, have changed their tune on. We stick to things, and we're sticking to this plan. We're sticking to this plan because we know it's in the economic interests of Australians.

It's often said to me, 'It's unpopular with some.' That may cause the Labor Party to lose their faith, to lose their belief and to lose their conviction that these things are good for the economy. But what I do know is popular is this: more and better paid jobs.

As a government you've got to be prepared to do the things that achieve those outcomes and not go to water the first time that someone makes a criticism of your policy. This Government will not relent to that. We stick to our plans, practically, to get the outcomes that we know produce more and better paid jobs.

That's why we're sticking to our plans on innovation. Just this morning we announced further changes, particularly to the early stage venture partnerships, which is part of that innovation agenda that continues to be rolled out by the Government.

The defence industry plan is supporting Australia's advanced manufacturing industry to transition. Our global economy is changing, and we're supporting our advanced manufacturing sector to change with it through the biggest recapitalisation of our defence forces since the Second World War, producing the two great dividends that coalition governments have always delivered—national economic security and national economic growth.

The importance of these reforms cannot be understated. The academic debate about this, I am sure, will continue, but Australians are interested in the results that the Coalition Government is delivering. And it's not just us; around the world, the global economic consensus of sensible governments is that we must reduce the tax burden on businesses that employ our citizens so as to give them the headroom to ensure that they can give our citizens more and better paid jobs.

The Labor Party have opposed us on this. They want Australia to be stranded on a high-tax island. They want to see jobs, investment, innovation and training—all of these things—go offshore. That's their choice and they must own the consequences for those decisions done on the basis of populism, not on economic policy. They have lost their economic compass in opposing this Bill. We know that they once supported these measures. In government, many years ago, under treasurers and prime ministers, they implemented similar measures. So it is disturbing that we see this shift occurring in the Labor Party when it comes to economic policy and the re-education program that has been put on the Labor Party by the Greens in this country as they move ever closer to the cohabitation on economic policy with the Greens, which we will only see further fused in the upcoming by-election in Batman. It was the Leader of the Opposition, then Assistant Treasurer, who said on 30 March 2011:

… corporate tax reform helps Australia's private sector grow and it creates jobs right up and down the income ladder… lowering the corporate rate for smaller businesses … creates an artificial incentive for Australian businesses to downsize. In worse case scenarios some businesses might actually lay people off to get smaller—and the size based different tax treatment would create a glass ceiling on business workforce growth.

We know that the Labor Party have stood for these sorts of changes before, but today in this place they continue to make excuses as to why they will not vote for their previous convictions. Their convictions have evaporated in the face of having to actually stand for economic common sense.

The Shadow Treasurer joins me at the table—not out of flattery but because he's on duty and he is welcome. With his leader, on 8 June 2016, he said: 'You'd need a microscope to find the impact of the corporate tax cut on economic growth.' But this stands in stark contradiction to what he said in his own book in 2013, where he said:

It is a Labor thing to have the ambition of reducing company tax, because it promotes investment, creates jobs and drives growth.

So Labor says that it can't be done because it cannot be afforded. What I don't understand, then, is what I said before: they reverse the company tax cuts and they end up with a bigger deficit. Explain that one to me. It can't be afforded, but, even when they get rid of them, they end up with a higher deficit. We know that the Shadow Treasurer said in February this year: 'The objection to the corporate tax rate is that this nation, at this point, cannot afford it. It is the biggest single hit on the budget that either side will propose.'

But in 2013 he said: 'The United Kingdom, facing a much tougher fiscal situation than Australia, has cut its company tax rate to 23 per cent in April 2013 to be further reduced to 21 per cent in April 2014.'

We know that the Leader of the Opposition talked about the need for company tax cuts to be part of an agenda for investment and growth when the deficit was at $41.5 billion and rising, back in 2011. In 2012, as Minister for Financial Services and Superannuation, the Leader of the Opposition said, 'Any student of Australian business and economic history since the eighties knows part of Australia's success was derived through the reduction in the company tax rate.' The deficit at that point was $37.1 billion and rising.

The Shadow Treasurer said on 22 September 2015: 'I would like to see the corporate tax rate come down over time'—which is what this Bill proposes, by the way. 'I've previously said that the nation should be aiming for a 25 per cent corporate tax rate'—the deficit at that time was $35.1 billion. The problem is that the Shadow Treasurer aims for this thing but can't hit it, because he's lost his conviction to follow through on the things he once believed in.

The Shadow Minister for Financial Services said on 2 May 2016 that Australia would go better with a lower company tax rate. The deficit at that point was $37.4 billion. Then there's the case regarding inequality. 'Recent trends,' the Shadow Treasurer said in 2017, 'certainly don't inspire optimism when the government tells people to trust them that the tax rate cut for business will magically trickle down.' Yet his own leader said on 30 March 2011, in a speech to ACOSS, 'Reducing the corporate tax rate sees more capital flowing into our domestic economy, which will flow on to workers in the form of higher wages, thereby improving the standard of living.'

Finally, they say you can't have the AAA credit rating and a corporate tax cut. With no help from the opposition, Australia has retained the AAA credit rating from all three ratings agencies—that was confirmed in the last few weeks—and we're one of only 10 countries to do so.

These are excuses for why the Labor Party are not supporting this Bill. As to whether they've changed their mind, never believed it in the first place or have lost their way, I'll let the Australian people decide. When they stand in this place today and vote against a plan that has already demonstrated in its first instalment its support for jobs growth in this country, and go against everything they've previously believed in government to court the chorus of populism, it's a sad day for the Labor Party.

This is the day when in this place they will vote their economic credentials out of existence. This is why they cannot be trusted to manage our $1.8 trillion economy—because they have lost their economic compass. They don't know where they're going. They don't know how to drive growth in the economy. They have no plan to lift wages in this country. They have embarked on their voyage to the other side to cohabit with the Greens, who now write economic policy for the Labor Party. As I said the other day in this place, when it comes to economic policy, if you don't know what you believe, no-one will believe in you, and that's why no-one believes in the Labor Party's economic credentials anymore.

]]>Address to the House of Representatives – Marriage amendmenthttp://sjm.ministers.treasury.gov.au/speech/034-2017/
Mon, 04 Dec 2017 06:42:39 +0000http://minister-sjm.tspace.gov.au/?post_type=speech&p=3325The debate regarding same sex marriage in Australia has been settled.

Australians were rightly given an opportunity to have their say, by this Government, and they have spoken. It’s time to get on with it.

As one of the principal proponents of the original plebiscite, I wanted to ensure that whatever the outcome was, that it was one that the country could reconcile itself to.

I was amongst the 39 percent that voted for the traditional view of marriage to be maintained. As a nation we must now move forward in grace and love, as my Christian faith teaches us.

I will respect the democratic outcome of this Australian Marriage survey, both nationally and in my own community, by not standing in the way of this Bill.

However, with the closure of one debate, a new one commences. This new debate is not about opposing same sex marriage, it is about sensibly protecting religious freedoms.

There are almost five million Australians that voted no in this survey who are now coming to terms with the fact that on this issue, they are a minority. That did not used to be the case in the Australia they have lived all or most of their lives in.

They have concerns that their broader views and their broader beliefs are also in the minority and therefore under threat. And they are seeking assurances at this time.

Assurances, rightly or wrongly, that the things that they hold dear are not under threat also because of this change.

On the night of the first referendum to establish our federation in June 1898, Alfred Deakin prayed ‘thy blessing has rested on us here yesterday and we pray that it may be the means of creating and fostering throughout Australia a Christlike citizenship’.

In an earlier speech campaigning in Bendigo for the Federation he quoted a local poet defining the true Australian goal of Federation as for ‘us to arise, united, penitent, and be one people - mighty, serving God’.

Our Constitution went on to proclaim ...

WHEREAS the people of New South Wales, Victoria, South Australia, Queensland, and Tasmania, humbly relying on the blessing of Almighty God, have agreed to unite in one indissoluble Federal Commonwealth … with the advice and consent of the Lords Spiritual and Temporal.

Then in S116 our Constitution deliberately afforded a protection ‘that the Commonwealth shall not make any law .. for prohibiting the free exercise of any religion.’

This is the religious inheritance of our Federation, our Constitution, from more than a century ago. If we ever act in dissonance with these founding principles, it will be to our peril.

This is not to say that Australia is a nation with an established state religion. It is not. We are thankfully free of such a restriction on our liberty.

Such freedom though should not be used as a weapon against the importance of faith, belief and religion in our society, or as a justification to drive faith and religion from our public square. At the same time, protection of religious freedoms cannot be used as a cloak for religious extremism, that undermines our freedoms.

We may be a secular state, but we are not a Godless people to whom faith, belief and religion are not important. Quite the contrary. It is deeply central to the lives of millions of Australians. In my own church, like many others, we refer to Australia as the great south land of the Holy Spirit.

Whether you raise your hands, bow to your knees, face the holy city, light incense, a candle or the menorah, faith matters in this country, and we cannot allow its grace and peace to be diminished, muffled or driven from the public square.

Separation of church and state, does not mean the inoculation of the influence of faith on the state.

The State shouldn’t run the church and the church shouldn’t run the State.

In fact, separation of church and state was set up to protect the church from the State, not the other way around. To protect religious freedoms.

As I argued in my maiden speech in this place, secularism, secular humanism, is no more our established state religion than any other. It is one of the many free views held by Australians. It holds no special place of authority in our Commonwealth.

For millions of Australians, faith is the unshakable cornerstone of their lives.

It informs their identity and provides a genuine sense of wellbeing. It is the reason why people can look beyond their own circumstances and see a greater purpose.

For countless Australians, faith is life.

In my maiden speech to parliament almost ten years ago, I spoke of the two key influences on my life - my family and my faith.

And how my faith in Jesus Christ was inherently personal, not political or preachy. As Christians we do not lay claim to perfection or moral precedence. In fact it is the opposite.

Conscious of the frailties and vanities of our own human condition, Christians should be more conscious of the same amongst those around us. This is why faith encourages social responsibility - the bedrock of faith in action.

I quoted Abraham Lincoln in that speech stating ‘Our task is not to claim whether God is on our side, but to pray earnestly that we are on His’.

I pointed to two of my heroes of faith, William Wilberforce and Desmond Tutu - the latter who supports same sex Marriage; men of courage and conviction who fought valiantly against the prevalent evils that had become a stain on society and delivered immeasurable social gains.

The freedom from slavery. The unravelling of apartheid and the coming together of a deeply divided nation. Countless lives saved and lives improved, because two men compelled to act by their faith.

All done with faith as a guide and an empowerment; faith that can change nations and the course of history.

Amid the formative stages of the “Free Mandela” campaign, Bishop Tutu told the BBC Mandela would be prime minister within five to ten years. The reporter mocked this pronouncement as hopelessly optimistic.

Bishop Tutu’s response highlighted the anchor of which his faith, or the optimism as described, was found.

“Brother,” Bishop Tutu said, “the Christian faith is hopelessly optimistic because it’s based on the faith of a guy who died on a Friday and everybody said it was utterly and completely hopeless - ignominious defeat. And Sunday He rose again.’’

The fragrance of faith has washed over society for centuries and helped to shape and mould it for the better.

Our own nation was founded, built and undeniably shaped by Christian values, morals and traditions that helped to unite a fledgling country. A nation blessed and formed on Christian conviction.

These issues of faith are not only gifted to us by our Federation fathers, but the many generations of Australians who have come to us since, including those from non-Christian faiths and experience.

A few years ago, I had the honour of visiting Lebanon for the ordination of our Maronite Bishop in Australia, Antoine Tarabay.

There in the striking Maronite Patriarchate above the bay of Jounieh, this generous and kind-hearted Sydney bishop committed himself to the sacrifice of the ministry as the leader of his Australian flock.

It was a deeply moving experience in surreal surroundings that resonated within me the importance of a life lived in the pursuit of God and the service of others.

But it was a tour of Holy Valley and the ancient villages in the north of the country with my friend Joseph Assaf - Hardine, Bcharre (Besharre), Ehden, Hasroun, Kousba and concluding in Tannourine, the Bishop’s home village, that truly reinforced to me once again the potency of faith, the persistence of faith and its importance in society and our individual lives.

Villages that have been ravaged for centuries by one bitter war after the nex - a constant cycle of upheaval, violence, and heartache.

But there was one thing that could never be stripped away, through a millennia of struggle. One thing that sustained these stoic communities.

It wasn’t the governments that came and went with the wind, it wasn’t the leaders that so promised peace.

It was their faith.

A faith that routinely stared adversity in the face and prevailed. A faith that held families together. When everything else was a struggle, their faith stood strong. A faith that the hundreds of thousands of Lebanese Maronite Australians brought with them to Australia from as early as the 1860s.

But so too did the many Greek Orthodox migrants, Coptic Christians from Egypt, still being persecuted in their home country today, Syrian Christians from both Orthodox and Catholic faiths and Armenians. The

And for the many Chinese, Korean and Filipino Australians, of Catholic, Baptist, Anglican, Presbyterian and Pentecostal faiths. Some brought their faith with them, others found it here in Australia.

When most of these migrants came to Australia it was not the Government they first turned to, to assist them to adjust to their new life in Australia. It was their local church or other religious community.

If you want to understand the strong opposition to changing our marriage act in western Sydney and elsewhere you must understand the central nature of faith and community to the lives of these and so many other Australians.

Nine out of the top ten electorates that voted No are represented by Labor members, and are comprised of the vibrant faith communities that I have just spoken of.

I would urge them all of these Labor members to be freed up, released from any constraint, that would enable them to stand with their constituents now in supporting amendments that deliver the protections of religious freedoms that are currently absent from this Bill.

To pretend this Bill is whole and satisfies their concerns is to confirm a lack of understanding and empathy for those who hold them.

These Australians are looking for acknowledgement and understanding from this Parliament and their representatives. They are seeking assurance that changes being made to our marriage laws will not undermine the stability, and freedom of their faith and religious expression - what they teach their children, what their children are taught, the values they share and foster within their families, community, within and without their Church walls.

This a reasonable request that this Parliament should support.

I commend the PM for initiating the Ruddock Review in protecting religious freedoms. Few people understand these communities and the issues and risks as well as the former Attorney. But that process is not, nor was it designed to be a substitute for sensible action now in this Bill.

To fail to make improvements to this Bill now would demonstrate a failure to appreciate not only the underpinnings of our own liberal democracy and Federation, but the nature of modern multicultural Australia.

I commend my colleagues both in the Senate and this house for standing firm on their convictions and beliefs; both representing their faith and those in their communities that share their values.

I will be joining many of my colleagues in supporting amendments to be moved by the Members for Deakin, Mitchell, Canning and Mallee.

I will be joining them in moving amendments to ensure that no organization can have their public funding or charitable status threatened as a result of holding views that are consistent with the traditional definition of marriage between a man and a woman.

The test of faith is the fruit that it produces. That is what Jesus taught in his parable of the fig tree.

The fruit of faith based organizations has been extraordinary - Mission Australia, Wesley Mission, Caritas, Anglicare, Baptist Care, our religious schools - the many Christian organisations involved in providing pastoral support in our schools - their funding through grants and other programmes and support through our tax system must continue to be about what they achieve, not what they consider to be the definition of marriage.

We need to ensure these protections are put in place.

It is now time to pass a truly inclusive Bill that recognizes the views of 100% of Australians, not just the 61%, and I urge the House to not miss this opportunity.